US FISCAL: Trump Tax Priorities Takes Shape With House Leadership Meeting

• RES 4: 0.6471 High Dec 9
• RES 3: 0.6400 50-day EMA               
• RES 2: 0.6341 High Dec 18   
• RES 1: 0.6273/0.6302 20-day EMA / High Jan 6
• PRICE: 0.6239 @ 20:02 GMT Jan 7 
• SUP 1: 0.6179 Low Dec 31 
• SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
• SUP 3: 0.6100 Round number support 
• SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing

Despite Monday’s gains, a bearish trend condition in AUDUSD remains intact. Recent weakness maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for an extension towards 0.6158 next, a Fibonacci projection. Initial firm resistance to monitor is 0.6276, 20-day EMA. It has been pierced. The 50-day EMA is at 0.6400.

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 143.39/144.48 - High Dec 9 High Nov 11  
• PRICE: 141.36 @ 19:44 GMT Jan 07
• SUP 1: 141.05 - 2.000 proj of the Aug 6 - Sep 3 - 9 price swing
• SUP 2: 140.54 - 2.236 proj of the Aug 6 - Sep 3 - 9 price swing
• SUP 3: 140-00 - Round number support    

A clear downtrend in JGB futures remains intact and this week’s fresh cycle lows, reinforce this condition. Note too that moving average studies on the continuation chart are in a bear-mode setup, highlighting a clear downtrend. The move down exposes 141.05, a Fibonacci projection point on the continuation chart. For bulls, a reversal would open 143.39 and 144.48, the Dec 9 and Nov 11 high respectively.

Mixed SOFR/Treasury wing trades reported Tuesday in addition to some chunky strangle sales as underlying futures drifted lower while projected rate cuts through mid-2025 continued to recede vs. this morning levels (*) as follows: Jan'25 at -1.2bp (-2.3bp), Mar'25 -10.2bp (-10.9bp), May'25 -14.7bp (-16.3bp), Jun'25 -23.2bp (-24.2bp).

• SOFR Options:
  • -4,000 SFRF5 95.81 puts, 3.5 ref 95.79
  • +10,000 SFRH5 96.12/96.37 call spds even over 20,000 95.56 puts
  • +5,000 SFRF5 95.68 puts, 0.5 vs. 95.775/0.10%
  • +10,000 0QJ5 95.50 puts, 7.5 vs. 96.005/0.20%
  • +10,000 SFRM5/SFRU5 97.00 call spds, 4.25
  • -4,000 SFRZ5 96.25/96.75 call spds vs 95.37 puts, 0.5
  • 5,000 0QF5 95.87/96.12 strangles 
  • -10,000 SFRM5 95.43/95.56 put spds, 075 ref 95.92
  • +5,000 SFRM5 95.43/95.56 put spds vs SFRZ5 95.25/95.37 put spds 1.5 net
  • +5,000 SFRU5 98.00 calls 3.0 ref 95.985
  • +5,000 SFRH5 95.81 puts, 9.0 vs. 95.79/0.25%
  • -2,000 SFRU5 95.75 straddles vs. 96.12 calls, 31.0 net
  • +10,000 SFRH5 95.87 puts, 12.5 ref 95.805
  • 1,500 0QF5 96.00/96.18 2x1 put spds ref 96.015
  • +15,000 0QZ5 97.00/98.00 call spds 9.5 vs. 95.96/0.14%
  • 4,000 0QH5 96.75 calls ref 96.025
  • 2,500 SFRH5 95.81/95.87/95.93 call flys ref 95.81
• Treasury Options:
  • -10,750 TYH5 108/108.5 strangles, 144 ref 108-07.5
  • 7,000 TYG5 108 puts, 33 ref 108-02, total volume over 20.3k
  • 5,000 USH5 106/110 put spds ref 112-23
  • 2,500 TYG5 111/114.75 1x2 call spds ref 108-16
  • 2,900 TUH5 103.25/103.62/103.87/104.25 call condors ref 102-24.25
  • 3,000 TYH5 108.5 straddles ref 108-16.5
  • 2,300 wk2 TY 109/109.5/110 call flys ref 108-15.5  (expire Jan 10)
  • over 11,000 wk3 FV 107.25/107.5/107.75 call flys ref 106-03.75 (expire Jan 17)
  • 5,600 FVG5 106.75 calls ref 106-04
  • 2,100 TYH5 105/107/109 put flys ref 108-18.5
  • 2,000 TYH5 109/110/111 call flys ref 108-16.5