MNI ASIA MARKETS ANALYSIS: Lg Pending Home Sales Miss

US TSYS: Rates Track New Highs in Equities

Tsys finished stronger, climbing back to near midmorning highs by the bell, tracking new all-time highs in equities (ESU1 4534.0). Rates see-sawed off mildly mixed levels after July pending home sales came out weaker than expected -1.8% vs. +0.3% est.

• While disappointing, JP Morgan economists said the decline was still better than their own estimate of -3.0%. JPM notes "sales data have been a bit noisy in recent months, with an 8.3% jump in May being partially reversed by declines in the two months of data reported since then."
• Support evaporates following 30Y Block sale: -7,753 USZ 163-11, sell through 163-13 post-time bid at 1016:41ET, 163-07 last. Tsy regained footing, see-sawing higher with 30Y bonds extending highs after the closing bell.
• Large Eurodollar flow: +25,000 EDZ1 99.82 (+0.005); Large Green Sep/Dec spd buy: +50,000 EDU3/EDZ3 at 0.115 and bid for another 40,000.
• Focus on Friday's Aug employ report, +750k est vs. +943k prior.
• The 2-Yr yield is down 1.2bps at 0.2033%, 5-Yr is down 2.9bps at 0.7707%, 10-Yr is down 2.4bps at 1.2835%, and 30-Yr is down 1.8bps at 1.8984%.

SHORT TERM RATES

US DOLLAR LIBOR: No settles due to London summer bank holiday

• Daily Effective Fed Funds Rate: 0.08% volume: $71B
• Daily Overnight Bank Funding Rate: 0.07% volume: $257B

• Secured Overnight Financing Rate (SOFR): 0.05%, $920B
• Broad General Collateral Rate (BGCR): 0.05%, $383B
• Tri-Party General Collateral Rate (TGCR): 0.05%, $354B
• (rate, volume levels reflect prior session)

• TIPS 7.5Y-30Y, $1.201B accepted vs. $4.029B submission
• Next scheduled purchases
• Tue 8/31 1010-1030ET: Tsy 10Y-22.5Y, appr $1.425B
• Wed 9/01 1100-1120ET: Tsy 7Y-10Y, appr $3.225B
• Thu 9/02 1010-1030ET: Tsy 22.5Y-30Y, appr $2.025B
• Fri 9/03 no buy operation ahead holiday, resume Tuesday Sep 7

FED: REVERSE REPO OPERATION, Nears Record High

NY Fed reverse repo usage climbs to 1,140.711B from 79 counter-parties vs. $1,120.015B on Friday. Record high of $1,147.089B set Wednesday, Aug 25.

EURODOLLAR/TREASURY OPTIONS SUMMARY

• 18,000 Green Sep 98.93/99.06 2x1 put spds
• -10,000 Dec 99.81 straddles, 5.0
• 2,300 Green Oct 98.25/98.62 put spds
• +2,500 Blue Sep 98.62/98.75 2x1 put spds, 2.5
• -4,000 Green Sep 98.87/99.00/99.12 put flys, 3.25
• -2,500 Blue Dec 98.37/98.87 put over risk reversals, 0.0 vs. 98.645/0.57%
• Overnight trade
• -27,500 Mar 99.75 puts, 1.5
• +5,000 Dec 99.75 puts, 1.0 vs. 99.82/0.20%

• 5,000 TYV 134.25 calls, 18
• 23,800 wk1 TY 133.5/134 call spds, 10
• +14,000 TYZ 136 calls, 18 vs. 133-12.5/0.18%
• +2,000 TYZ 130.5/131.5/132.5 put trees, 1
• Overnight trade
• -3,000 TYV 134/134.5 call strip, 31

PIPELINE: Corporate Debt Issuance

August high-grade corporate debt issuance running total: $93.62B/M

• Date $MM Issuer (Priced *, Launch #)
• 08/30 $Benchmark IFC +5Y +21a
• 08/26-27 No new corporate or supra-sovereign issuance Thu/Fri; $8.85B/wk

MARKET SNAPSHOT

Key late session market levels:

• DJIA down 8.72 points (-0.02%) at 35446.83
• S&P E-Mini Future up 26.75 points (0.59%) at 4532
• Nasdaq up 157.2 points (1%) at 15286.4
• US 10-Yr yield is down 2.4 bps at 1.2835%
• US Sep 10Y are up 7.5/32 at 134-4
• EURUSD up 0.0004 (0.03%) at 1.1799
• USDJPY up 0.06 (0.05%) at 109.9
• WTI Crude Oil (front-month) up $0.42 (0.61%) at $69.16
• Gold is down $7.23 (-0.4%) at $1810.35

• EuroStoxx 50 up 7.82 points (0.19%) at 4198.8
• German DAX up 35.56 points (0.22%) at 15887.31
• French CAC 40 up 5.38 points (0.08%) at 6687.3