Tsy/Eurodollar Futures/Options Roundup

Strong, carry-over risk-off tone kicked off new week Mon, normally all about Wed's FOMC policy annc was overshadowed by growing Russia/Ukraine tension and what NATO, US and allies would do if Russia invades it's southern boarder.

• NATO forces on standby "and sending additional ships and fighter jets to NATO deployments in eastern Europe”. Pentagon issued US troop standby alert ahead possible Russia/Ukraine action. Pentagon official, spokesman John Kirby added U.S. IS TAKING STEPS TO HEIGHTEN READINESS OF FORCES, 8,500 U.S. PERSONNEL READY TO BE ACTIVATED TO AID NATO.
• Risk-off actually scaled back late, bonds weaker but off lows, while equities rebounded but still traded in the lower after the FI close (ESH2 -4353.0 vs. 4212.75 low (mid-July '21 lows).
• Limited react to data: CHICAGO FED NATIONAL ACTIVITY INDEX AT -0.15 VS 0.44 PRIOR; US FLASH JAN SERVICES PMI 50.9; DEC 57.6.
• Decent 2Y sale, Tsy futures remain bid after $54B 2Y note auction (91282CDV0) stops through: 0.990% high yield vs. 1.002% WI; 2.81x bid-to-cover outpaces last moth's 2.55x, well over five auction avg: 2.51x.
• Short expiriy options continued to favor hedging for quarterly 25bp rate hikes starting in March, additional 2-3 hikes in 2023, policy path uncertainty around late 2024.
• Tues' data roundup: FHFA House Price Index, Consumer Confidence, Richmond Fed Mfg, $55B 5Y note sale (91282CDT5).
• The 2-Yr yield is down 4.5bps at 0.9566%, 5-Yr is down 3.5bps at 1.5223%, 10-Yr is down 1.6bps at 1.7422%, and 30-Yr is up 1.9bps at 2.0899%.