MNI US CLOSING FI ANALYSIS: Late Deal/No-Deal Chop

US TSY SUMMARY: Leaning Towards No-Deal Today

Markets buffeted by deal/no-deal stimulus headlines during second half. White House Speaker Pelosi remained optimistic, Sen Shelby expressed no optimism of a deal, while Sen Mitt Romney flat-out opposing $1.8T deal (or more) adding to late sales in equities. Stanza: Sen majority leader McConnell said would hold vote for stimulus if deal reached, vote does not mean pass.

Astrazeneca vaccine trial to resume in a few days likely contributed to the midday bid in equities. Other salient headlines:
GOOGLE ACCUSED BY U.S. OF ABUSING MARKET POWER IN LANDMARK CASE, Bbg
BREXIT - UK PM JOHNSON TELLS GREEK PM: EU HAVE EFFECTIVELY ENDED NEGS, Rtrs
Little to no react to multiple Fed speakers, Chicago Fed Pres Evans said stepping up asset purchases would have limited effect on already-low borrowing costs now, but the Fed could consider offering further accommodation later in the recovery.
Trade volumes were about average, TYZ>1.1M after the bell, two-way flow from fast$, prop and bank portfolios in short end.
The 2-Yr yield is down 0.2bps at 0.1431%, 5-Yr is up 0.2bps at 0.3361%, 10-Yr is up 2.2bps at 0.7907%, and 30-Yr is up 3.8bps at 1.5976%.

TECHNICALS, US 10Y Continuation

US 10YR FUTURE TECHS: (Z0) Attention Turns To Support

RES 4: 139-25 High Oct 2
RES 3: 139-17 76.4% retracement of Sep 29 to Oct 7 sell-off
RES 2: 139-14 High Oct 15
RES 1: 139-01+? High Oct 20
PRICE: 138-26 @ 16:12 BST Oct 20
SUP 1: 138-20+ Low Oct 7 and bull trigger
SUP 2: 138-18+ Low Aug 28 and the bear trigger
SUP 3: 138-16+ Low Jun 23 (cont)
SUP 4: 138-12 61.8% retracement of the Jun - Aug rally (cont)

Treasuries have reversed last week's positive tone and remain weaker. Monday's move lower marks an extension of the pullback from 139-14, Oct 15 high. The move through support at 138-28+, Oct 13 low exposes 138-20+, Oct 7 low and 138-18+, Aug 28 low. The latter is the bear trigger where a break would signal a resumption of the reversal that occurred on Aug 4. This would open 138-04+, a Fibonacci projection. Firm resistance is at 139-14.

AUSSIE 3Y TECHS

AUSSIE 3-YR TECHS: (Z0) Looking To Clear Resistance

RES 3: 100.00 - Psychological round number
RES 2: 99.886 - 3.0% Upper Bollinger Band
RES 1: 99.845 - All time High Oct 20, 15 and the bull trigger
PRICE: 99.830 @ 16:15 BST Oct 20
SUP 1: 99.760 - Low Oct 1 and 2
SUP 2: 99.705 - Low Sep 18, 21 and 22
SUP 3: 99.675 - Low Sep 7 and key support

Aussie 3yr futures are largely unchanged and remain bullish. The price surge at the tail-end of September and early October confirmed bullish trend conditions. Recent activity is viewed as a pause in the uptrend and in pattern terms has taken on the appearance of a bull flag. This is a continuation pattern and reinforces current trend conditions. A break of 99.845, Oct 20 high and last week's high would open 99.889. Support is at 99.760.

AUSSIE 10Y TECHS

AUSSIE 10-YR TECHS: (Z0) Uptrend Remains Intact

RES 3: 99.480 - High Mar 10 and the all-time high
RES 2: 99.360 - High Apr 2 (cont)
RES 1: 99.290 - High Oct 16
PRICE: 99.235 @ 16:29 BST Oct 20
SUP 1: 99.075 - Low Oct and the key support
SUP 2: 99.055 - Low Sep 18 and 21
SUP 3: 98.970 - Low Sep 8

Aussie 10y futures remain bullish following last week's strong impulsive rally. The break above 99.180, an area of congestion reflecting highs in Sep and early October confirmed a resumption of the uptrend that started on Aug 28. Attention turns to 99.300 and 99.360. The latter is the Apr 2 high (cont). The near-term bull trigger is 99.290, Oct 16 high. On the downside, firm trend support is at 99.075, Oct 5 low.

JGB TECHS

JGB TECHS: (Z0) Bullish Focus

RES 3: 152.55 - High Aug 5 (cont)
RES 2: 152.36- 3.0% Upper Bollinger Band
RES 1: 152.29 - High Sep 24 and the bull trigger
PRICE: 152.16 @ 16:35 BST Oct 20
SUP 1: 151.75 - Low Oct 08 and trend support
SUP 2: 151.54 - Low Sep 7
SUP 3: 151.43 - Low Sep 1

JGBs remain firmer following the recent recovery that has resulted in a move above 152.00. Attention turns to 152.29, Sep 4 high, a key resistance and the bull trigger. A break of this level would confirm a resumption of the uptrend and open 152.36, a Bollinger band objective and 152.55, Aug 5 high (cont). On the downside, key trend support has been defined at 151.75, Oct 8 low.

US TSY FUTURES CLOSE: Deal/No-Deal Chop

Broadly weaker by the bell, just off late session lows on choppy trade. Markets buffeted by deal/no-deal stimulus headlines during second half. While House Sp Pelosi remains optimistic, Sen Shelby expressed no optimism of a deal, while Sen Mitt Romney flat-out opposing $1.8T deal (or more) adding to late sales in equities. Yld curves steeper, near highs, update:

3M10Y +1.58, 69.096 (L: 65.327 / H: 69.851)
2Y10Y +2.741, 64.723 (L: 61.316 / H: 65.19)
2Y30Y +4.269, 145.455 (L: 140.173 / H: 145.936)
5Y30Y +3.748, 126.104 (L: 121.595 / H: 126.398)
Current futures levels:
Dec 2Y up 0.12/32 at 110-13.75 (L: 110-13.25 / H: 110-13.8)
Dec 5Y down 0.75/32 at 125-23.5 (L: 125-21.7 / H: 125-24.7)
Dec 10Y down 6/32 at 138-23.5 (L: 138-21 / H: 138-28.5)
Dec 30Y down 30/32 at 173-18 (L: 173-12 / H: 174-14)
Dec Ultra 30Y down 2-9/32 at 215-31 (L: 215-21 / H: 218-03)

US EURODLR FUTURES CLOSE: Whites Hold Steady

Steady in the short end, Reds through Golds weaker -- moderate session lows. Lead quarterly back to steady after dipping briefly after 3M LIBOR rebounded +0.00712 from Mon's all-time low to 0.21575% (-0.00263/wk).

Dec 20 steady at 99.765
Mar 21 steady at 99.795
Jun 21 steady at 99.805
Sep 21 steady at 99.805
Red Pack (Dec 21-Sep 22) -0.005 to steady
Green Pack (Dec 22-Sep 23) -0.010 to -0.015
Blue Pack (Dec 23-Sep 24) -0.015 to -0.035
Gold Pack (Dec 24-Sep 25) -0.035 to -0.050

US DOLLAR LIBOR: Latest settles

O/N -0.00050 at 0.08038% (-0.00075/wk)
1 Month +0.00237 to 0.14575% (-0.00563/wk)
3 Month +0.00712 to 0.21575% (-0.00263/wk)
6 Month -0.00237 to 0.25188% (-0.00562/wk)
1 Year -0.00262 to 0.33713% (+0.00213/wk)

US TSYS/SHORT END RATES

STIR: FRBNY EFFR for prior session:

Daily Effective Fed Funds Rate: 0.09% volume: $54B
Daily Overnight Bank Funding Rate: 0.08%, volume: $155B

US TSYS: Repo Reference Rates

Secured Overnight Financing Rate (SOFR): 0.09%, $903B
Broad General Collateral Rate (BGCR): 0.06%, $344B
Tri-Party General Collateral Rate (TGCR): 0.06%, $324B
(rate, volume levels reflect prior session)

FED: NY Fed Operational Purchase

Tsy 4.5Y-7Y, $6.001B accepted vs. $18.032B submission
Next scheduled purchase:
Wed 10/21 1010-1030ET: TIPS 7.5Y-30Y, appr $1.225B

OUTLOOK: Look Ahead To Wednesday

US Data/Speaker Calendar (prior, estimate)
21-Oct 0700 16-Oct MBA Mortgage Applications (-0.7%, --)
21-Oct 1000 Clev Fed Pres Mester, mon-pol discussion
21-Oct 1030 16-Oct Distillate stocks w/w change
21-Oct 1030 16-Oct Gasoline stocks w/w change
21-Oct 1030 16-Oct crude oil stocks ex. SPR w/w
21-Oct 1130 TBA 105D Bill CMB 20-Oct
21-Oct 1130 TBA 154D Bill CMB 20-Oct
21-Oct 1200 Mn Fed Pres Kashkari, const amend for students
21-Oct 1200 Dallas Fed Pres Kaplan, Hispanic CoC
21-Oct 1300 US Tsy $22B 20Y-bond/R/O auction (912810SQ2)
21-Oct 1330 NY Fed VP Singh on Fed's copr credit facility
21-Oct 1400 Federal Reserve releases Beige Book
21-Oct 1645 StL Fed Pres Bullard, mon-pol, eco-outlook, Q&A

PIPELINE: Kingdom of Denmark Priced

Date $MM Issuer (Priced *, Launch #)
10/20 $2B *Denmark 2Y +1
10/20 $3B United Airlines 4.1Y EETC deal (enhanced equipment trust certificates, corporate debt securities)
Expected Wednesday
10/21 $Benchmark World Bank (IRBD) 5Y +11a

EURODOLLAR/TREASURY OPTIONS

Eurodollar Options:

+2,500 Blue Mar 91/93 put spds vs short Mar 96/97 put spds, 2.5 net db for conditional bear curve steepener
+2,500 Blue Mar 91/93 put spds, 6.25 legged
-5,000 Green Dec 92/93/95/96 put condors, 1.5
+2,000 Red Mar'22 2x1 put spds, 1.75 legged
-6,000 Green Nov 97 calls, 1.5 vs. 99.69/0.22%
+2,000 Blue Mar 90/92 put spds, 4.25
Overnight trade
1,000 Blue Nov 92/93/95/96 put condors
1,000 Blue Jan 93/96 comb or strangle

Tsy Options:

+6,700 TYZ 137 puts, 11/64
+8,000 FVZ 124 puts, 1.5
>+65k TYZ 137.5/138/139 put trees, +50k at 3, trades up to 6/64
over 1,000 USZ 175/177 1x2 cal spds, 5/64
+6,000 TYX 138.5 puts, 6/64 vs. 138-25/0.25%
Overnight trade
-10,000 TYZ 140 calls, 15/64
2,500 TYX 139/139.25 call spds

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MNI US CLOSING FI ANALYSIS: Late Deal/No-Deal Chop

TECHNICALS, US 10Y Continuation

AUSSIE 3Y TECHS

AUSSIE 10Y TECHS

JGB TECHS

US DOLLAR LIBOR: Latest settles

US TSYS/SHORT END RATES

EURODOLLAR/TREASURY OPTIONS

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