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

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

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

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US TSYS: Late SOFR/Treasury Option Roundup: Put Interest Rising

US TSYS
USBulletMarketsFixed Income BulletsNorth America

Option desks reported a modest pick-up in SOFR & Treasury put options in the second half while underlying futures continue to extend the low end of the day's range. Curves steeper with short end rates outperforming (2s10s now at 24.813 vs. 19.960 low), while projected rate cuts into early 2025 look steady to slightly lower vs. this morning (*) as follows: Jan'25 steady at -2.1bp, Mar'25 -11.7bp (-13.7bp), May'25 -16.0bp (-18.8bp), Jun'25 -23.4bp (-25.3bp).

  • SOFR Options:
    • +10,000 SFRU5 95.62/95.81 call spds 1.0-1.25 over 96.06/96.31 call spds
    • +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:
    • 10,000 TYF5 108.25/108.5 put spds 4 ref 108-19
    • -5,000 USF5 113/113.5 put spds 9 ref 113-27
    • -12,000 TYG5 111 calls, 9 ref 108-23.5
    • 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 reported a modest pick-up in SOFR & Treasury put options in the second half while underlying futures continue to extend the low end of the day's range. Curves steeper with short end rates outperforming (2s10s now at 24.813 vs. 19.960 low), while projected rate cuts into early 2025 look steady to slightly lower vs. this morning (*) as follows: Jan'25 steady at -2.1bp, Mar'25 -11.7bp (-13.7bp), May'25 -16.0bp (-18.8bp), Jun'25 -23.4bp (-25.3bp).

  • SOFR Options:
    • +10,000 SFRU5 95.62/95.81 call spds 1.0-1.25 over 96.06/96.31 call spds
    • +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:
    • 10,000 TYF5 108.25/108.5 put spds 4 ref 108-19
    • -5,000 USF5 113/113.5 put spds 9 ref 113-27
    • -12,000 TYG5 111 calls, 9 ref 108-23.5
    • 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