STIR: Post-Data SOFR Call Trade
Call structure volume continues with underlying futures looking to extend post-data highs. Heavy buying in SOFR Whites (SFRM5-SFRH6) while projected rate cuts through mid-2025 gain momentum vs. early morning levels (*) as follows: May'25 at -3.9bp, Jun'25 at -18.3bp (-17.2bp), Jul'25 at -30.5bp (-28.5bp), Sep'25 -44.7bp (-43.5bp).
- SOFR Options:
- +6,000 SFRM5 95.93/96.06 call spds, 2.25 vs. 95.865/0.12%
- -5,000 SFRM5 96.0 calls, 7.0 ref 95.88 to -.885
- +1,500 SFRM5 96.00/96.25/96.37 broken call flys 2.5 ref 95.875
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CANADA 2025 CAPITAL EXPENDITURE PLANS +5.5%
- CANADA 2025 CAPITAL EXPENDITURE PLANS +5.5%
- PRIVATE SECTOR INVESTMENT SEEN +5.5%, GOVERNMENT +5.7%-STATCAN
US: MNI POLITICAL RISK - House Takes Initiative After Budget Vote
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- 11:00 ET 16:00 GMT: US President Donald Trump will convene the first Cabinet meeting of his second term.
- House Speaker Mike Johnson (R-LA) scored a major win, passing a budget resolution that will underpin a mammoth reconciliation bill covering the bulk of President Trump’s agenda.
- The House vote will ease some concerns from the Senate, but there are still major obstacles to a final package - namely the Senate's position that a tax package must make the TCJA permanent.
- Republican leaders will meet today to discuss the March 14 government funding deadline. In response to the House budget vote, the implied probability of a government shutdown decreased slightly but the overall risk remains elevated.
- CBC reports that “North America-wide tariffs are not a done deal", citing a White House clarification on Trump's Monday comments.
- Trump ordered the Commerce Department and USTR to examine tariffs on all copper imports.
- Markets are braced for Nvidia’s Q4 earnings report – the first since DeepSeek disrupted the Artificial Intelligence sector.
- Ukrainian President Volodymyr Zelenskyy will visit the White House on Friday to meet with President Trump and sign a deal to share mineral revenue with the US.
- The Senate voted to undo a Biden-era rule limiting offshore drilling.
- Republicans are likely to shield the bulk of Biden’s clean energy investments.
- Poll of the Day: 80% of Americans believe tariffs will lead to increased prices.
Full Article: US DAILY BRIEF
BONDS: OAT/Bund spread targets the 2025 low.
OAT Block trade, suggest buyer:
- OATH5 ~1k at 124.28.
OATH5 is through the session high and testing the immediate resistance right here at 124.32.
Further out for OAT, sees 124.73.
France leads in Futures, helping push the OAT/Bund spread tighter, now by 1.3bp.
Some will look at the 2025 low of ~70.8bps, better support is seen at 68.65bps, the September 2024 low.
(Chart source: MNI/Bloomberg).
