MNI US CLOSING FI ANALYSIS: Stimulus Still Interruptus

US TSY SUMMARY: Strong Risk-Off

Stimulus, pharma and tech company related headlines remain key driver for risk-of bid in rates, weaker equities (US$/Yen bounce contributing factor (105.55H).

• Mkt on edge after House Majority Leader Hoyer on MSNBC said Speaker Pelosi and Tsy Sec Mnuchin "want to make a deal" but added Pres Trump is "erratic, impulsive on talks". Sen Majority Leader McConnell said wanted vote on $500B targeted relief package sometime next week. Latest counter offer rejected by House Speaker Pelosi and Democrats.
• Pharmaceutical co. Eli Lilly following J&J, halting antibody trial on potential safety concerns, equities falling to new session lows.
• Equities extended session lows on back of earlier Apple headline: "CHINESE PLATFORMS CANCELED APPLE LIVESTREAM, NO REASON GIVEN," Bbg, platforms: Bilibili, Iqiyi, Tencent and Weibo.
• The 2-Yr yield is down 1.4bps at 0.139%, 5-Yr is down 3.5bps at 0.3024%, 10-Yr is down 4.8bps at 0.7256%, and 30-Yr is down 6.2bps at 1.5094%.

US 10Y FUTURES TECHS: (Z0)‌ Strong Recovery ‌ ‌

• RES 4: 139-25 High Oct 2
• RES 3: 139-17 76.4% retracement of the Sep 29 - Oct 7 sell-off
• RES 2: 139-11+ 61.8% retracement of the Sep 29 - Oct 7 sell-off
• RES 1: 139-07+/09 20- and 50-day EMA
• PRICE: 139-05+ @ 18:18 BST Oct 13
• SUP 1: 138-28 Low Oct 13
• SUP 2: 138-20+ Low Oct 7 and the bull trigger
• SUP 3: 138-18+ Low Aug 28 and the bear trigger
• SUP 4: 138-04+ 1.000 proj of Aug 4 - 28 sell-off from Sep 3 high

Treasuries rallied Tuesday signalling a possible reversal of the recent bearish theme. A strong daily close today would reinforce this possibility and signal scope for stronger S/T gains. Futures are testing a band of resistance between 139-07+ and 139-09, the 20- and 50-day EMAs. Clearance of this hurdle would strengthen a S/T bullish argument and together with today's gains, open 139-11+, a retracement level. Initial support is at 138-28+.

AUSSIE 3Y TECHS: (Z0) Broader Bullish Theme Intact

• RES 3: 100.00 - Psychological round number
• RES 2: 99.882 - 3.0% Upper Bollinger Band
• RES 1: 99.840 - Alltime High Oct 6 and the bull trigger
• PRICE: 99.8205 @ 18:27 BST Oct 13
• 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

The Aussie 3yr bond price surge at the tail-end of September and early October confirmed bullish trend conditions. The recent period of consolidation 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 the current trend condition. A break of 99.840, Oct 7 high would open 99.882, a Bollinger band objective. 99.760 marks support, Oct 1 and 2 low.

AUSSIE 10Y TECHS: (Z0) Approaching Key Resistance

• RES 3: 99.223 - 3.0% Upper Bollinger Band
• RES 2: 99.185 - High Aug 5 (cont)
• RES 1: 99.180 - High Sep 23, 28, 29 and Oct 2 congestion
• PRICE: 99.165 @ 18:42 BST Oct 13
• 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 maintain a bullish tone. Recent gains off 99.075, Oct 6 refocuses attention on the congestion area at 99.180 and the bull trigger. A break of this hurdle would confirm a resumption of the underlying uptrend and open 99.223, a Bollinger band projection. Key support has been defined at

99.075, Oct 6 where a break would threaten the bullish outlook and signal a near-term reversal.

JGB TECHS: (Z0) Eyeing Resistance

• RES 3: 152.53 - 1.50 proj of Aug 28 - Sep 4 rally from Sep 7 low
• RES 2: 152.34 - 3.0% Upper Bollinger Band
• RES 1: 152.29 - High Sep 24 and the bull trigger
• PRICE: 152.05 @ 18:50 BST Oct 13
• SUP 1: 151.75 - Low Oct 08 and key near-term support
• SUP 2: 151.54 - Low Sep 7
• SUP 3: 151.43 - Low Sep 1

JGBs continue their recovery and futures have climbed back above 152.00. The short-term outlook has improved for bulls and attention turns to resistance at 152.20, Sep 30 high where a break would expose the key resistance at 152.29, Sep 24 high and the bull trigger. A break of this level would confirm a resumption of the uptrend and open 152.34, a Bollinger band objective and 152.53, a Fibonacci projection. Support is at 151.75, Oct 8 low.

US TSY FUTURES CLOSE: Near Highs

Broadly higher, near top end session range, yld curves flatter on moderate volumes, TYZ>920k), update:

• 3M10Y -3.887, 63.087 (L: 62.414 / H: 65.734)
• 2Y10Y -2.857, 58.625 (L: 58.26 / H: 61.45)
• 2Y30Y -3.846, 137.439 (L: 137.106 / H: 141.002)
• 5Y30Y -2.14, 121.137 (L: 120.937 / H: 123.081)
• Current futures levels:
• Dec 2Y up 0.87/32 at 110-14 (L: 110-13.12 / H: 110-14.12)
• Dec 5Y up 4.75/32 at 125-28 (L: 125-23.5 / H: 125-28.75)
• Dec 10Y up 9.5/32 at 139-6.5 (L: 138-28.5 / H: 139-08)
• Dec 30Y up 24/32 at 175-4 (L: 174-08 / H: 175-07)
• Dec Ultra 30Y up 1-22/32 at 219-17 (L: 217-15 / H: 219-22)

US TSY SUPPLY: Review Week's Tsy Auctions

US EURODLR FUTURES CLOSE: Bid Out The Strip

Steady in the short end to moderately bid out the strip. Lead quarterly holds steady since 3M LIBOR set' +0.00800 to 0.23688% (+0.01275/wk). Latest lvls:

• Dec 20 steady at 99.760
• Mar 21 steady at 99.790
• Jun 21 +0.010 at 99.805
• Sep 21 +0.015 at 99.805
• Red Pack (Dec 21-Sep 22) +0.010 to +0.020
• Green Pack (Dec 22-Sep 23) +0.025 to +0.035
• Blue Pack (Dec 23-Sep 24) +0.040 to +0.045
• Gold Pack (Dec 24-Sep 25) +0.045 to +0.050

USD LIBOR FIX

O/N 0.08000 (-0.00175)

1W 0.09650 (-0.00038)

1M 0.14838 (0.00413)

2M 0.18088 (-0.00425)

3M 0.23688 (0.008)

6M 0.25450 (0.01162)

12M 0.34550 (-0.00213)

FED: NY Fed Operational Purchase:

• TSY 20Y-30Y, $1.733B accepted of $3.992B submission
• Next scheduled purchase:
• Wed 10/14 1010-1030ET: TIPS 7.5-30Y, appr $1.225B
• Wed 10/14 Next forward schedule release at 1500ET

PIPELINE: Toyota Motor Cr Launched

• Date $MM Issuer (Priced *, Launch #)
• 10/13 $2.75B #Toyota Motor, $1.15B 2Y +25, $600M 2Y FRN SOFR+34, $1B 5Y +53; adds to $3B issued on May 20: $1.25B 2Y +100, $1B 3Y +115, $750M 5Y +125.
• 10/13 $1.4B Gaz Finance, inaugural US$ issuance, perp NC5.25, 4.6%a
• 10/13 $1B #Petrobras Global Finance 5.6% 2031 Tap, 4.4% yld
• 10/13 $600M #Athene Global Funding 3Y +103
• 10/12 No new issuance Monday
• Expected to issue Wednesday:
• 10/14 $1B EIB WNG 7Y +15a
• 10/14 $Benchmark Council of Europe 3Y +6a
• 10/14 $Benchmark CADES 10Y Social bond +30a

OUTLOOK: US Data/Speaker Calendar (prior, estimate)

• 14-Oct 0700 9-Oct MBA Mortgage Applications (4.6%, --)
• 14-Oct 0830 Sep Final Demand PPI (0.3%, 0.2%)
• 14-Oct 0830 Sep PPI ex. food and energy (0.4%, 0.2%)
• 14-Oct 0830 Sep PPI ex. food, energy, trade (0.3%, 0.2%)
• 14-Oct 0835 Richmond Fed Barkin eco-outlook conf
• 14-Oct 0900 Fed VC Clarida annual IIF meeting
• 14-Oct 1030 Fed VC Quarles financial stability panel
• 14-Oct 1400 Richmond Fed Barkin, eco-outlook, NY econ club
• 14-Oct 1420 NY Fed Logan, SEC webinar
• 14-Oct 1500 Dallas Fed Pres Kaplan, Fed Quarles on financial supervision
• 14-Oct 1800 Dallas Fed Pres Kaplan, eco/mon-pol virtual town hall