MNI China Daily Summary: Friday, January 10

MNI BRIEF: China To Adopt Very Proactive Fiscal Policy-Offical

CANADA LIBERAL LEADERHIP VOTE TO REPLACE TRUDEAU SET FOR MAR 9

MNI BRIEF: PBOC Suspends Bonds Trades As Yields Drop

MNI: PBOC Net Drains CNY14.8 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Higher At 7.1891 Fri; -2.36% Y/Y

USDA: CORN STOCKS 12,074M BSL ON JAN 1

MNI: USDA: 2024/2025 CORN PRODUCTION EST 14.87B BSL

EZ/UK T-Bill Calendar: Germany, France Auction on Monday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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US TSYS: Early SOFR/Treasury Option Roundup, Pre-Holiday Positioning

US TSYS
USBulletMarketsFixed Income BulletsNorth America

Option desks report mixed SOFR & Treasury option flow on lighter volumes this morning (aside from large Feb'25 10Y OTM put buyer). Light positioning ahead of Christmas holiday closures, underlying futures near the low end of the day's range. Curves have pared earlier steepening (2s10s now at 21.593 vs. 23.143 high), while projected rate cuts into early 2025 look steady to slightly lower vs. this morning (*) as follows: Jan'25 -2.1bp (-2.1bp), Mar'25 -10.5bp (-13.7bp), May'25 -15.7bp (-18.8bp), Jun'25 -22.0bp (-25.3bp).

  • SOFR Options:
    • +7,500 SFRZ5 96.50/97.00/97.50/98.00 call condors 6.0 ref 95.97
    • -5,000 SFRJ5 95.81 puts 7.75-8.0 over the 95.87/96.12/96.37 call fly
    • 4,900 SFRM5 96.12/96.37 call spds ref 95.89
    • 2,300 SFRM5 96.50/96.62 call spds ref 95.89
    • 1,300 SFRU5 96.00/96.18 call spds vs. 95.37 puts ref 95.955
  • Treasury Options:
    • 4,250 TYG5 108 puts, 30 ref 108-24.5
    • over +56,500 TYG5 104 puts, 3 ref 108-26.5
    • 1,500 TYG5 103.5/107.5 put spds vs. 112 calls ref 108-25.5
    • 2,600 TYG5 103 puts, 2 ref 108-26.5
    • 2,300 TYH5 114 calls, ref 108-26.5
    • 2,100 FVH5 106.25 calls ref 106-07.75
    • 2,500 TYG5 113 calls
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Option desks report mixed SOFR & Treasury option flow on lighter volumes this morning (aside from large Feb'25 10Y OTM put buyer). Light positioning ahead of Christmas holiday closures, underlying futures near the low end of the day's range. Curves have pared earlier steepening (2s10s now at 21.593 vs. 23.143 high), while projected rate cuts into early 2025 look steady to slightly lower vs. this morning (*) as follows: Jan'25 -2.1bp (-2.1bp), Mar'25 -10.5bp (-13.7bp), May'25 -15.7bp (-18.8bp), Jun'25 -22.0bp (-25.3bp).

  • SOFR Options:
    • +7,500 SFRZ5 96.50/97.00/97.50/98.00 call condors 6.0 ref 95.97
    • -5,000 SFRJ5 95.81 puts 7.75-8.0 over the 95.87/96.12/96.37 call fly
    • 4,900 SFRM5 96.12/96.37 call spds ref 95.89
    • 2,300 SFRM5 96.50/96.62 call spds ref 95.89
    • 1,300 SFRU5 96.00/96.18 call spds vs. 95.37 puts ref 95.955
  • Treasury Options:
    • 4,250 TYG5 108 puts, 30 ref 108-24.5
    • over +56,500 TYG5 104 puts, 3 ref 108-26.5
    • 1,500 TYG5 103.5/107.5 put spds vs. 112 calls ref 108-25.5
    • 2,600 TYG5 103 puts, 2 ref 108-26.5
    • 2,300 TYH5 114 calls, ref 108-26.5
    • 2,100 FVH5 106.25 calls ref 106-07.75
    • 2,500 TYG5 113 calls