Ending the week with long bond pushing towards 5% (4.85 now)
May 9, 2025
*************
-Rate futures hammered yesterday, with reds leading on SOFR strip, -16.0. SFRU6 settled 9672.5, down from 9706.0 one week earlier Wednesday (just before payrolls). In treasuries, the 5y was weakest, with the yield +12.3 bps to 3.993%. Tens rose 10 bps to 4.371%.
–So in six trading sessions SFRM6 fell 36.5 (9702.5 to 9666), and SFRM7 fell 28, from 9692 to 9664. May midcurves expire in six sessions including today. ATM straddles, 9662.5 strike, are 15 and 14 bps. Of course the previous 6 days included payrolls and FOMC.
–Buyer of about 50k SFRZ5 9568.75p for 3.5. Settled 4.75 ref 9633.0. EFFR is 4.33% or 9567.0 SOFRRATE has been between 4.32 and 4.38. May SOFR (SFRK5) settles next week and is 9570.5. Might say that the 9568.75p are cheap protection in case of hike thru year-end. Though 30s were up only 6.8 bps to 4.834%, the long end trades quite heavy. USM5 settled 114-13 and is printing 114-04 as of this writing.
–US/UK trade agreement was announced though it seems details were sparse. Now for the China talks which will likely prove more elusive unless the US caves in.
–Is this possibly accurate? Notification from Spanish authorities: If you wish to withdraw more than 3k EUR in cash, you must notify the Tax Agency at lest 24 hours in advance… You must also specify the purpose of the withdrawal. Failure to comply may result in fines up to 150k EUR.
