US TSYS: BONDS, EQUITIES BREAK HIGHER LATE/QUIET AHEAD WED CPI

US TSYS SUMMARY: US rates have been rotating around mixed levels on narrow range

for much of the session, long end gained late on decent moderate (TYH>1.1m) well

off last wk's frantic pace. No significant data on day, while Clev Fed Mester

made hawkish comments at event in Ohio. For the most part, acct's opted to ply

the sidelines ahead Wed's CPI release (0.3% est). - US$ index slipped .471,

89.737; equities recovered early losses/traded higher late (emini +5.0,

2660.25); gold firmer (XAU +5.91, 1328.67); oil softer (WTI -0.13, 59.16).

- Tsys traded firmer near top end of range by the open on modest volume even

w/Japan back from holiday. Tsys gained midway through Asia hours trade just as

US$ vs. Yen tumbled from 108.7 to 107.6 (Nov'16 lows) w/equities following suit.

- Flow two-way on net, positioning ahead CPI, curve flatteners in 2s and 5s vs.

long end; swap spds ground tighter on more mixed flow. Overnight repo, 5s join

2s at fail (-1.02% and 1.64% respectively) while 10s inched off fail. Heavy

option volume, long puts unwound

- Late ylds: 2Y 2.102%, 3Y 2.307%, 5Y 2.543%, 7Y 2.743%, 10Y 2.833%, 30Y 3.119%

US TSY FUTURES CLOSE: Long end gained late on decent/moderate (TYH>1.1M) after

rotating around mixed levels on narrow range for much of the session, acct's

opted to ply the sidelines ahead Wed's CPI release (0.3% est). Latest curve

update:

* 2s10s -5.525, 72.382 (77.294H/72.335L);

* 2s30s -5.131, 101.319 (106.233H/101.155L);

* 5s30s -0.760, 57.593 (59.123H/57.138L);

Current futures levels:

* Mar Ultra bonds up 16/32 at 157-02 (156-09L/157-09H)

* Mar 30-yr Bond futures up 12/32 at 144-25 (144-06L/144-30H)

* Mar 10-yr futures up 6.5/32 at 120-03 (120-27L/121-04.5H)

* Mar 5-yr futures up 2.25/32 at 114-22 (114-18.75L/114-24H)

* Mar 2-yr futures down .25/32 at 106-21.75 (106-20.5/106-22.75H)

US EURODOLLAR FUTURES CLOSE: Steady/mixed in the short end, Greens-Golds mildly

higher by the close, upper end narrow range. Current White pack (Mar'18-Dec'18):

* Mar'18 +0.005 at 98.030

* Jun'18 +0.000 at 97.855

* Sep'18 -0.005 at 97.745

* Dec'18 -0.005 at 97.620

* Red pack (Mar'19-Dec'19) steady to +/-0.005

* Green pack (Mar'20-Dec'20) +0.010-0.015

* Blue pack (Mar'21-Dec'21) +0.015-0.025

* Gold pack (Mar'22-Dec'22) +0.025-0.030

US SWAPS: Spds running tighter across the curve by the close, front end in the

lead foer much of the session. Moderate two-way curve action on the day,

flattener in 5s30s and some switch activity in 10s. Deal-tied flow in the

intermediates. Coming into the session, sources reported 2s vs. 3s flatteners,

light deal-tied hedging. OTC vol receding on the curve flattening bounce in

underlying rates. Latest spread levels:

* 2Y  -2.31/25.50

* 5Y  -0.12/9.44

* 10Y -0.50/0.75

* 30Y -1.12/-18.00

PIPELINE: $1.5B KFW 21M launched, $500M NWB 2-2020 FRN launched

Date $MM Issuer/Rating/Desc/Maturity/Yld/Leads; Priced *; Launch #:

02/13 $500M *NWB 2/2020 FRN 3ML +4 

02/13 $1.5B #KFW 21M Global MS -5

02/13 $1B Rentenbank 2Y MS -3a

02/13 $Benchmark, General Dynamics CSRA deal

Potential upcoming issuance in the near term:

Chatter, 3M (MMM) A1/AA-

Chatter, Bank of New Zealand (BZLNZ) A1/AA-

Chatter, KeyBank 

Chatter, Fifth Third Bank (FITB) A3/A

Chatter, State Street Corp (STT) A1/A

OUTLOOK: Data/speaker calendar (prior, estimate): 

- Feb 14 09-Feb MBA Mortgage Applications (0.7%, --) 0700ET

- Feb 14 Jan CPI (0.2%, 0.3%) 0830ET

- Feb 14 Jan CPI Ex Food and Energy (0.2%, 0.2%) 0830ET

- Feb 14 Jan retail sales (0.4%, 0.2%) 0830ET

- Feb 14 Jan retail sales ex. motor vehicle (0.4%, 0.5%) 0830ET

- Feb 14 Jan retail sales ex. mtr veh, gas (0.4%, --) 0830ET

- Feb 14 Dec business inventories (0.4%, 0.3%) 1000ET

- Feb 14 Feb Atlanta Fed inflation (2.0%, --) 1000ET

- Feb 14 09-Feb crude oil stocks ex. SPR w/w (1.9m bbl, --) 1030ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* 35,000 Jun 80/82 call spds at even vs. short Jun 80 calls

* +30,000 Green Feb 73 calls, 1.5

* +5,000 long Green Jun 58/71 3x1 put spds, 18.5

* 7,500 Green Jun 75 calls, 8.0 vs. 97.25/0.28%

* 10,000 Green Mar 73 calls, 6.0 vs. 97.29/0.34%

* +40,000 Green Mar 75/77 call spds, 2.0 vs. 97.28/0.14%

* +5,000 Green Jun 63/66 put spds, 1.0

* +8,000 Sep 73 puts, 1.0

* +5,000 Jun 82 calls, 0.75

* Update, total -35,500 Mar 81/82 3x2 put spds, 12.0

* Update, total +15,000 May 80/81 1x2 call spds, cab

* Update, total -25,000 Blue Jun 72 puts, 26.0 vs. 97.12/0.60%

* 15,000 Dec 71/73 put spds, 3.5 vs. 97.60

* 8,000 Red Jun19 75 straddles, 41.5

* 5,000 Blue Jun 76 puts, 26.0 vs. 97.12/0.60%

* 3,000 Blue Feb 67/68/70 put flys, 0.5

Blocks, 1106:17-:45ET

* total 25,000 Mar 81/82 put spds, 11.0

* 1,750 short Feb/short Mar 75 straddle spds, 7.0

Large 1Y/2Y midcurve package, 

* -20,000 short Feb 73/75/76 put fly, 6.0

* -20,000 short Feb 73/75/76 put fly, 4.0

* -20,000 Green Apr 67/70 2x1 put spds from 1.5-2.0

* +40,000 Green Mar 72/73 call spds, 5.0

Elsewhere, lighter flow includes

* 3,000 Apr/Jun 73 put spds, 2.75

* 3,000 short Feb 75 puts, 1.5

* 3,000 Green Jun 68/72/76 iron flys, 2x strangles, 14.5

* 4,000 short Mar 72/73/75 put flys, 2.5

* 3,000 Jun 80/81 call spds, 1.5

* 2,000 Green Feb 71/72 put spds 2.5 over Green Feb 75 calls, adds to 32k on

screen at 2.0

* 1,500 Green Mar 70/72 2x1 put spds, 3.5

* +32,000 Green Feb 71/72 put spds2.0 over the Green Feb 75 calls

* +10,000 Mar 80 puts, 2.0

* 2,000 Green Jun 63/66 put spds

Block, 0724:08

* 7,500 short Jun 72/75 put spds, 9.5 vs. 97.49/0.25%

Tsy options, Pit/screen:

* 3,000 FVH 114.25 puts, 7/64 vs. 114-20

* 3,187 FVH 114 puts vs. 2,125 FVH 115 calls, 2/64 vs.114-19.75

Blocks, 1212:45ET

* 25,200 wk3 TY 121.25/121.75 call spds, 8/64 vs. 120-29/0.08%=

Blocks, 1047ET

* 45,000 wk3 TY 121.5/121.75 call spds, 4/64 net

Block, 1003:30ET -- Rolling out/down, largely adding to last Thu Block:

* -56,100 TYJ 118 puts, 7/64

* +56,100 TYJ 119.5 puts, 28/64

* -17,609 TYH 122 puts, 1-14/64

* -22,979 TYH 122.5 puts, 1-46

* -22,730 TYH 120-27

(Reminder, last week Block late Thursday:

* +62,855 TYJ 118/119.5 put spds, 22/64

* -23,916 TYH 120/120.5 put strip 40/64 w/

* -47,834 TYH 122 puts, 118 w/ -10,800 TYH 120-29)

* 3,500 TYH 123/TYJ 120.5 call spds, 42/64 vs. 120-13

* 5,000 TYH 120 puts, 7/64 vs. 120-29.5/0.18%

* 6,000 TYK 120/120.5 put spds, 15/64

--MNI Chicago Bureau; tel: +1 312-431-0089; email: bill.sokolis@marketnews.com

[TOPICS: MTABLE,M$U$$$,M$$FI$,MN$FI$,MN$FX$]