BOE: Pill when asked on whether he would vote for a 50bp cut

Pick-up in downside SOFR & Treasury puts late overnight, particularly in 10s as underlying futures extend lows, breach technical support (TYH5 107-28.5 low, 10Y yield 4.7280% high) after Trump headline re: new tariff emergency declaration made a splash this morning. In turn, projected rate cuts through mid-2025 drift near late Tuesday lows* as follows: Jan'25 at -1.2bp, Mar'25 -9.3bp (-10.2bp), May'25 -14.7bp (-14.9bp), Jun'25 -22.8bp (-23.2bp).

• SOFR Options:
  • 2,500 3QG5 95.75 puts ref 95.835
  • 10,000 SFRJ5 95.62/95.75/95.81/95.87 put condors ref 95.90
  • 2,000 2QH5 96.00/96.25/96.50 call flys ref 95.92
  • 5,000 SFRM5 96.25 calls ref 95.905
  • 5,000 SFRZ5 96.00/96.12/96.18/96.31 call condors ref 96.00
  • 4,650 2QH5 96.18/96.31/96.37 broken call flys ref 95.93
  • 1,750 0QM5 96.50/96.87/97.12 broken call flys ref 95.99
  • 2,000 SFRH5 95.00/95.75 put spds ref 95.79
• Treasury Options:
  • over 3,100 TYH5 107.5/108 put spds 18 ref 107-31
  • 3,000 USH5 107 puts, 27 ref 111-22
  • over +30,700 TYG5 107.5 puts, 17 last ref 108-04.5
  • 5,000 TYG5 109/110 call spds vs. 107.5 puts, 5 net
  • Block, -10,000 TYH5 106.5/107.5 2x1 put spds, 5 net 2-legs over ref 108-06

• Latest Block crossed at 0724:55ET:
  • +2,500 TUH5 102-22.12, post time offer vs.
  • -3,000 TYH5 107-30, through 107-30.5 post time bid
• The 2s10s curve has climbed to 41.621 this morning, highest since May 16, 2022

• Despite the underlying dollar bid, the underperformance for UK assets has prompted a solid uptick for EURGBP on Wednesday, and a firm break above resistance at 0.8311, the 50-day EMA.
• We have reached a high of 0.8348 so far, and this represents a six-week high for the cross. Price action today undermines the dominant bear theme and highlights the potential a stronger reversal. Further weakness below the 2024 highs in cable would likely add to the topside momentum in EURGBP.
• Above here, the focus will be on 0.8376, the Nov 19 high and technical bull trigger.