OIL: Mexico's Pemex Looks Towards Other Buyers Following Tariffs

• -10,000 TYH5 108.75 straddles, 115-114
  • In 30Y options, recent flow includes
  • +5,000 USH5 110 puts, 9
  • +9,000 wk1 US 115 calls, 3

Bonds and oil rally after a U.S. official tells RTRS that U.S President Trump is expected to sign an executive order on Tuesday restoring "maximum pressure" on Iran, with the Secretary of State set to “modify or rescind existing sanctions waivers and cooperate with treasury to implement a campaign "aimed at driving Iran’s oil exports to zero.”

• The negative correlation between bonds and oil had been at play before crude turned, helping core global FI markets away from session lows, before bond markets reacted to the headlines in more of a risk-off fashion.
• U.S. yields now little changed to 1bp higher on the day, light steepening on the curve.
• Meanwhile, German yields are 2-3bp higher and UK yields are 2-4bp higher.
• Trump headline risk remains elevated in the early weeks of his Presidency and is set to remain a mainstay during his second term.

• RES 4: 6178.75 High Dec 6 and key resistance    
• RES 3: 6162.25 High Jan 24 
• RES 2: 6147.75 High Jan 31 
• RES 1: 6069.00 High Feb 3                
• PRICE: 6030.25 @ 14:44 GMT Feb 4 
• SUP 1: 5935.50 Low Feb 3           
• SUP 2: 5892.37 76.4% retracement of the Aug 5 - Dec 6 bull leg
• SUP 3: 5842.50 Low Jan 14 
• SUP 4: 5809.00 Low Jan 13 and a key resistance 

The S&P E-Minis contract started the week on a bearish note. The gap lower Monday and a breach of support at 5948.00, the Jan 27 low, strengthens a bearish threat and cancels - for now - a recent bullish theme. An extension down would open 5892.37, a Fibonacci retracement point. Initial resistance is at 6069.00, today’s intraday high. Gains are considered corrective, however, a stronger rally would expose key resistance at 6178.75, the Dec 6 high.