SOFR & Treasury option trade remained mixed late Thursday, SOFR call flow picked up in the second half as underlying futures extended highs after it became apparent Trump's reciprocal tariff plans would not be implemented until early April, sentiment improved as the delay gave additional time for negotiations. Projected rate cuts through mid-2025 steady to slightly firmer vs. this morning (*) as follows: Mar'25 steady at -0.5bp, May'25 steady at -3.9bp, Jun'25 at -11.1bp (-9.8bp), Jul'25 at -15.1bp (-13.6bp).
Find more articles and bullets on these widgets:
Mixed trade on net with SOFR options leaning toward puts as underlying futures scaling off of this morning's knee-jerk rally, huge Mar'25 10Y call buying: nearly 130,000 108.5 OTM calls. Projected rate cuts through mid-2025 continue to retreat, current vs. late Friday levels* as follows: Jan'25 steady at -0.7bp, Mar'25 at -5.8bp (-4.9bp), May'25 -10.2bp (-9bp), Jun'25 -17.9bp (-16.5bp), Jul'25 at -21.2bp (-18.7bp).
The trend condition in GBPUSD remains bearish and the pair is trading closer to its recent lows. Last week’s move down confirmed a resumption of the downtrend and marks an extension of the price sequence of lower lows and lower highs. Note too that moving average studies are in a bear-mode position, highlighting a dominant bear trend. Sights are on 1.2087 next, a Fibonacci projection. Initial firm resistance is at 1.2367, the Jan 9 high.
The trend condition in EURUSD remains bearish and recent short-term gains have proved to be a correction. Friday’s move lower resulted in a print below 1.0226, the Jan 2 low. The pair also traded lower Monday. The break of 1.0226 confirms a resumption of the downtrend. Sights are on 1.0138 next, a Fibonacci projection. Resistance to watch is 1.0458, Dec 30 high. The latest bounce is considered corrective.