MNI ASIA MARKETS ANALYSIS: Waiting on BOC, ECB Policy Annc's

US TSYS: Focus on Midweek BoC, ECB Policy Announcements

• Tsys hold modest gains across the board after the close -- near session highs since the initial move off session lows on the open. EGBs reacted similarly with no substantive headline or event to trigger. Yield curves held steeper profiles all session (5s30s +4.17 at 91.27 late).
• Equities did continue to make new all-time highs (ESZ1 4564.0H) as latest earnings cycle expected to pick up this week. Meanwhile, WTI crude above $85/bbl (first time since late 2014) "after Saudi Arabia urged caution in boosting supply" Bbg.
• Large Eurodollar futures Block/cross: +10,000 White packs (EDZ1-EDU2) at +0.025 early in the second half, while Reds (EDZ2-EDU3) outperformed +0.045 after the bell. Option flow more paired with pick-up in low delta calls and call spds in the first half.
• The 2-Yr yield is down 2bps at 0.4332%, 5-Yr is down 2.3bps at 1.1727%, 10-Yr is up 0bps at 1.6325%, and 30-Yr is up 1.6bps at 2.0847%.

SHORT TERM RATES

US DOLLAR LIBOR: Latest settlements

• O/N -0.00200 at 0.07150% (+0.00038 total last wk)
• 1 Month -0.00013 to 0.08775% (+0.00750 total laast wk)
• 3 Month +0.00962 to 0.13450% (+0.00125 total last wk) ** Record Low 0.11413% on 9/12/21
• 6 Month +0.00588 to 0.17788% (+0.01150 total last wk)
• 1 Year +0.01250 to 0.32938% (+0.03725 total last wk)

• Daily Effective Fed Funds Rate: 0.08% volume: $74B
• Daily Overnight Bank Funding Rate: 0.07% volume: $274B

• Secured Overnight Financing Rate (SOFR): 0.05%, $863B
• Broad General Collateral Rate (BGCR): 0.05%, $357B
• Tri-Party General Collateral Rate (TGCR): 0.05%, $331B
• (rate, volume levels reflect prior session)

• Tsys 22.5Y-30Y, $1.999B accepted vs. $4.227B submission
• Next scheduled purchases
• Tue 10/26 1010-1030ET: TIPS 7.5Y-30Y, appr $1.225B
• Wed 10/27 1010-1030ET: Tsy 10Y-22.5Y, appr $1.425B
• Thu 10/28 1010-1030ET: Tsy 0Y-2.25Y, appr $12.425B
• Fri 10/29 1010-1030ET: Tsy 10Y-22.5Y, appr $1.425B

FED Reverse Repo Operation

NY Fed reverse repo usage climbs to $1,413.188B from 77 counterparties from $1,403.020B on Friday. Record high remains at $1,604.881B from Thursday, September 30.

EURODOLLAR/TREASURY OPTIONS SUMMARY

• +5,000 short Dec 99.37/99.50 call spds, 2.75
• +3,000 short Nov 99.37/99.50 call spds, 1.5
• +15,000 Mar 99.50/99.62 put spds, 1
• +3,000 Red Dec 96.00/97.00/98.00 put trees, 1.5
• +5,000 short Dec 98.87/99.12 put spds, 4.5
• -8,500 Green Mar 98.37 puts, 20.5 vs. 98.425/0.48%
• 10,000 short Nov 99.00/99.12 put spds vs. 99.31 calls
• +2,500 Mar 99.12/99.25/99.37 call trees, 1.0 vs. 99.00/0.10%
• +5,000 Jun 99.25/99.50/99.62 put trees, 0.0
• +5,000 Green Sep 97.62/99.12 put spds, 14.5 vs. 98.28/0.18%
• 5,000 Dec 99.87 calls, cab
• +5,000 Mar 99.81/99.87 1x3 call spds, 1.5
• +5,000 short Nov 99.50 calls, 0.5 vs. 99.215/0.05%
• Overnight trade
• 6,000 Dec 99.75/99.81 put spds

• +3,000 TYF 127 puts, 13
• Overnight trade
• Block, 4,904 USZ 149/151/153 put flys, 5
• 22,500 TYZ 129/130 2x1 put spds
• 10,000 wk5 TY 129/129.5 put spds
• 5,000 FVZ 124.5 calls

EGBs-GILTS CASH CLOSE: Peripheries Outperform As ECB Week Begins

German bonds strengthened across the curve Monday, while the UK saw bull steepening, following the lead of US Treasuries which saw an early afternoon rally.

• Little in the way of macro catalysts in the session, with some of last week's moves faded ahead of the ECB meeting this week and BoE next.
• Italy outperformed the space following S&P's ratings outlook revision to positive from stable after the close Friday. Portuguese 10s spread to Bunds dipped below 50bp, again nearing a 12-year tight level of 49bp (last set in January).
• BOE Tenreyro's commentary was predictably dovish-leaning, little market reaction.
• Supply included an auction tap of 7-Yr NGEU for E2.5bln.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

• Germany: The 2-Yr yield is down 2.7bps at -0.664%, 5-Yr is down 2.9bps at -0.452%, 10-Yr is down 0.9bps at -0.114%, and 30-Yr is up 3bps at 0.269%.
• UK: The 2-Yr yield is down 1.4bps at 0.647%, 5-Yr is down 0.9bps at 0.82%, 10-Yr is down 0.5bps at 1.14%, and 30-Yr is down 0.3bps at 1.358%.
• Italian BTP spread down 2.5bps at 107.9bps/ Portuguese down 1.1bps at 50.4bps

EGB Options: Light Trade To Open The Week

Monday's Europe rates / bond options flow included:

• RXZ1 170.5/171.5cs, bought for 11.5 in 2.5k
• OEZ1 134.5/135/135.5c fly, bought for 8 in ~2.2k
• OEZ1 134.50/75 with 134.50/135.00cs strip, bought for 22.5 in 1k
• SFIH2 99.45/55/75c ladder, bought for 1.5 in 8k
• SFIM2 99.20/99.40cs 1x2, bought the 1 for flat in 4k

FOREX: EUR Crosses Come Under Pressure As ECB Beckons

• G10 currencies exhibited mixed performances to start the week with a lack of economic data and a slew of central bank decisions scheduled over the coming days.
• The Euro was a notable underperformer ahead of Thursday's ECB rate decision and press conference. EURUSD held once again between 1.1665-70 before selling pressure saw the pair dip back below the 1.16 mark to lows of 1.1591. Broader trend conditions have remained bearish with recent gains for the pair considered corrective. Key support and the bear trigger is 1.1524.
• With the single currency under some renewed pressure, the most significant moves since the open were in EURAUD and EURNZD, rising 0.65% and 0.45% respectively. This marked a resumption of a broad downtrend in place for both these pairs throughout October and may be monitored more closely as Thursday's meeting looms.
• USDCAD continues to consolidate ahead of Wednesday's BoC decision. The pair however remains in downtrend with moving average conditions remaining in bear mode, reinforcing current trend conditions. Initial firm resistance is seen at 1.2494, Sep 3 low. A break would ease bearish pressure.
• Another light data calendar on Tuesday with US consumer confidence the headline. Markets will focus their attention on Wednesday's release of Australian CPI and the Bank of Canada October meeting.

FX: Expiries for Oct26 NY cut 1000ET (Source DTCC)

• EUR/USD: $1.1600-10(E1.4bln), $1.1720-30(E849mln)
• USD/JPY: Y114.00($590mln), Y114.50($1.1bln)
• AUD/USD: $0.7400(A$561mln)
• USD/CAD: C$1.2400($670mln)

PIPELINE: Synchrony Launched, Goldman Sachs Expected Shortly

• Date $MM Issuer (Priced *, Launch #)
• 10/25 $750M #Synchrony 10Y +125
• 10/25 $600M Goldman Sachs PerpNC5 4.375%a
• 10/25 $Benchmark SVB Financial 5Y +80a
• No New Issuance Friday; total for week at $63.25B, $120.7B/month

EQUITIES: Stocks Shrug Off Early Weakness to Start Busiest Week of the Quarter

• Following a shaky cash equity open on Wall Street, all three major indices head into the close in positive territory, with the e-mini S&P hitting a fresh alltime high in the process and extending the winning streak for futures to nine consecutive sessions. This puts markets on a particularly positive footing ahead of the busiest week of the quarter for corporate earnings, as just shy of 50% of the S&P500 by market cap are due to report.
• Earnings highlights this week include General Electric, Visa, Microsoft, Alphabet, Boeing, GM, McDonald's, Apple, Amazon, Caterpillar, Chevron and ExxonMobil. Full schedule with timings and EPS/Rev expectations here: https://marketnews.com/mni-us-earnings-schedule-bu...
• European markets were similarly positive, although CAC-40 underperformed to finish with losses of 0.3% as luxury stocks slipped, led by the 1.1% slide in LVMH.

COMMODITIES: WTI Plumbs New Cycle High, Tops Fib Projection

• WTI crude futures traded to a fresh trend high Monday, with prices showing above $85/bbl for the first time since late 2014 and keeping the sequence of higher highs and higher lows intact. This reinforces the uptrend, with $85.01, a Fibonacci projection also giving way.
• Oil remains bullish alongside broader risk assets, with equities continuing to grind higher and plumbing a fresh record level. WTI and Brent reversed gains into the close, but the underlying bullish trend is clearly still in charge.
• Gold traded sharply higher Friday before finding resistance. The yellow metal probed resistance at $1800.6, Oct 14 high and this highlights a short-term bullish theme and removes recent bearish concerns. Further gains would open $1834.0, the Sep 3 high.