EM CEEMEA CREDIT: MNI EM Credit Market Wrap - CEEMEA (13 Feb)

• The tightening of German-UK spreads has underpinned EURGBP outperformance on Tuesday, with the cross still up around half a percent on the session. The latest pop higher prompted EURGBP to match the touted resistance level of 0.8448 in recent trade, the Oct 31 high and a key reversal trigger point.
• The cross has edged ~15 pips lower following the technical hold, which potentially boosts its significance ahead of tomorrow’s inflation data release, particularly given the underlying bull cycle that is now in play.
• As noted, a breach would signal scope for a move towards 0.8494, the August 26 high. Separately, the August highs reside at 0.8625, which could garner attention should UK fiscal concerns/uncertainty deteriorate further. Both the 20-day and 50-day EMA’s represent initial support for the cross, currently intersecting around 0.8325.

Better SOFR put structure buying since the open, fading this morning's post-PPI rally with underlying futures scaling off of this morning's knee-jerk rally. 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 -17.6bp (-16.5bp), Jul'25 at -20.4bp (-18.7bp).

• +3,000 SFRM5 95.81/95.93/96.18 2x3x1 call flys 3.0 ref 95.835
• +15,000 0QK5 94.75/95.00 put spds, 2.0 vs. 95.905/0.05%
• +10,000 SFRU5 95.50/95.75/96.00 put flys, 6.5
• +15,000 SFRZ5 95.37/95.62/95.87 put flys, 5.5-5.75 ref 95.895
• +5,000 SFRM5 95.87/96.31 call spds 8.0 ref 95.835
• +4,000 SFRG5 95.62/95.68/95.75 put flys 3.0 ref 95.74
• +5,000 SFRZ5 95.37/95.62/95.87 put flys 5.5 ref 95.875

• SFIM5 95.75/96.00cs, bought for 6.75 in 24k.
• SFIM5 95.70/96.00cs, bought for 8.75 and 9 in 20.5k.