OIL: Crude Maintains Early Losses After US Crude Stocks Build

• +5,000 TUH5 102-24 (+.12), buy through 102-23.88 post time offer at 1040:36ET, DV01 $192,000. The 2Y contract trades 102-24.25 last

Factory orders came in stronger than expected in November when accounting for upward revisions in the final Manufacturers’ Shipments, Inventories, & Orders report, though core capital goods orders were slightly weaker than they first appeared. 

• The 0.4% M/M fall in factory orders (vs -0.3% expected) was offset by an upward revision to October  (+0.5% vs +0.2%), while ex-transportation growth came in at +0.2% for a second month (reflecting a 0.1pp upward revision to prior).
• Broader durable goods orders were revised down slightly (-1.2% vs -1.1% prelim), due to slower growth in machinery orders than previously estimated (-0.6pp to +0.4%). Core capital goods orders growth was revised down to 0.4% M/M from 0.1% (0.7% prelim), with core shipments down to 0.3% (0.5% prelim).
• The latter figures meant that while November was a fairly solid month in the context of a poor 2024 for core capital goods, the preliminary estimates painted an overly flattering picture.
• Despite the downward core revisions, we note the final data were still much better than expectations vs the preliminary release (core cap goods orders had been expected +0.1%), and we continue to regard the data as indicative of stabilizing domestic durable goods orders. That should translate into more solidity in broader business investment. Core capital orders have been positive for the past couple of months on a Y/Y basis (0.8% in Nov, after 0.7% in Oct), with shipments flat on a Y/Y basis (after 6 negative months).
• Though as broader surveys indicate (including ISM Manufacturing and MNI Chicago PMI), the manufacturing sector appears to have improved since a summer bottom even if activity remains weak.

Better SOFR & Treasury put option volume on net so far, SOFR more two-way as early underlying support reversed after Trump denied tempered tariff story by the Washington Post. Tsy options see huge Mar'25 10Y put buying. Projected rate cuts through mid-2025 look weaker vs. late Friday levels (*) as follows: Jan'25 at -2.3bp (-2.8bp), Mar'25 -11.8bp (-13.2bp), May'25 -16.8bp (-17.8bp), Jun'25 -25.8bp (-26.5bp).

• SOFR Options:
  • -15,000 SFRZ5 95.25/95.75 2x1 put spds, 2.0 ref 96.02
  • -3,000 2QH5 95.00/95.50 put spds 3.5 ref 95.98
  • +6,000 0QZ5 97.00/98.00 call spds, 10.0 vs. 96.005/0.14%
  • Block: 10,000 SFRU5 95.62/95.81 put spds 7.0 vs. 10,000 96.75/97.12 call spds, 4.5, 1.0 net package
  • over 9,400 SFRH5 95.68 puts, 1.5 ref 95.82
  • 2,000 SFRF5/SFRH5 95.87/96.00/96.06 broken call fly spd
  • 2,000 SFRM5 97.00/98.00 call spds ref 95.935
  • 4,000 SFRF5 95.75/95.81/95.87/95.93 put condors ref 95.80
• Treasury Options:
  • over +100,000 (50k blocked) TYH5 106 puts, 14 ref 108-18.5
  • 6,000 TYG5 106 puts, 2
  • 4,500 TYG5 109.5 calls, 15 ref 108-17
  • 2,250 TYG5 104 puts ref 108-15.5
  • 4,700 TYH5 108 puts, 50 ref 108-15