MNI China Daily Summary: Wednesday, September 4

MNI: UK AUG FINAL SERVICES PMI 53.7 (FLASH: 53.3); JUL 52.5

RPT-MNI POLICY: Fed Prefers Gradual Rates Easing If Jobs Allow

MNI: PBOC Sets Yuan Parity Higher At 7.1148 Weds; +2.17% Y/Y

MNI: PBOC Net Drains CNY276.6 Bln via OMO Wednesday

CHINA PBOC CONDUCTS CNY0.7 BLN VIA 7-DAY REVERSE REPOS WEDS

MNI: EUROZONE JUL PPI +0.8% M/M, -2.1% Y/Y

MNI: EUROZONE FINAL AUG SERVICES PMI 52.9 (FLASH: 53.3); JUL 51.9

MNI: GERMANY AUG SERVICES PMI 51.2 (FLASH: 51.4); JUL 52.5

AUSTRALIA: Albanese Lines Up Budget for May Election

AUSTRALIA: Albanese Lines Up Budget for May Election

UK: Week Ahead

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Early SOFR/Treasury Option Roundup: Mixed Ahead NFP

US TSYS

Mixed option trade on modest overnight volumes ahead this morning's headline employment data. SOFR options seeing better call structure interest (flys, condors targeting Q1'24); Treasury options seeing better 10Y put trade with underlying weaker, near Thu's lows. Projected rate cuts for early 2024 steady to slightly lower vs. late Thursday: December flat at 5.333%, January 2024 cumulative -2.7bp at 5.302%, March 2024 chance of rate cut at -55.2% with cumulative of -16.5bp at 5.165%, May 2024 -70.1%, cumulative -34.0bp at 4.989%. Fed terminal at 5.33% in Feb'24.

  • SOFR Options:
    • Block, 3,000 0QM4 97.00 calls, 24.0 ref 96.405
    • Block, 5,000 SHRH4 94.25 puts, 1.25 ref 94.865
    • Block, 7,000 2QH4 97.12/97.87 call spds 8.5 vs. 96.555/0.17%
    • 2,000 SFRF4 94.93/95.00 call spds ref 94.865
    • 2,000 SFRH4 94.75/94.87/95.00 call flys
    • 5,000 SFRH4 94.87/95.00/95.12/95.25 call condors ref 94.87
    • Block, 4,000 2QH4 96.87/97.87 call spds, 15.5 vs. 96.57/0.28%
    • 1,500 SFRF4 94.75/94.81 2x1 put spds
    • 4,000 0QZ3 95.75 puts ref 95.915
    • 3,000 0QZ3 95.56/95.68/95.75/95.87 put condors, ref 95.925
  • Treasury Options:
    • 3,000 wk2 TY 111.5/112 call spds, 2 ref 110-24
    • 4,400 wk2 FV 107/108.25 strangles, 9.5 ref 107-11.25 (expire today)
    • 6,000 TYF4 108.25/109.25 put spds ref 110-24.5
    • 1,000 wk3 TY 109.75/110 2x3 put spds ref 110-26
    • 2,000 TYF4 110 puts, 27 ref 110-31
    • Block: 6,050 TYF4 108.5/109.5 put spds, 12 ref 110-31
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