US TSYS: CARRY-OVER RISK-ON, GOV SHUTDOWN AVERTED?

US TSY SUMMARY: Tentative risk-on theme continues, equities tugged higher (SPX

+14.75 at 2759.5) partially based on competing headlines that Trump will sign

bipartisan border funding deal and to avoid self-imposed Feb 15 deadline, but

potential for late hour rejection always a potential. 

- MNI poll sees near 45% expect Trump to reject deal but open door to extending

deadline, 26% expect Trump to accept deal as is while 21% see Trump calling a

national emergency. Only 4% expect a rejection and second government shutdown.

- Third consecutive session heavy deal-tied selling, $5B ATT 10Y/30Y issue leads

after Tue's $11.5B Altria, week on pace for >$50B issuance.

- Knee-jerk program, fast$ selling after flat Jan CPI, rates largely held early

range, risk-on gained momentum on Trump headlines, supply hedging added

pressure; 2s10s, 5s30s flatteners.

- On tap for Thursday: Aside from weekly claims, Final Demand PPI (0.1% est) for

January; Retail Sales (0.0%) for December; business inventories for November

(0.2%). Tsy cash/ylds: 2Y 99-29.75 (2.535%), 5Y 99-27.75 (2.613%), 10Y 99-08.5

(2.708%), 30Y 99-10.5 (3.033%).

US TSY FUTURES CLOSE: Mildly weaker across the curve, near mi-range. Deceptively

decent volume with March/June rolls gaining momentum. Tsy yld curves bear

flattening, update:

* 2s10s -1.281, 16.699 (16.081L/18.289H);

* 2s30s -2.361, 49.314 (48.948L/51.699H);

* 5s30s -2.393, 50.334 (50.085L/52.701H);

Current futures levels:

* Mar Ultra bonds down 11/32 at 160-15 (160-06L/160-29H)

* Mar 30-yr Bond futures down 7/32 at 145-24 (145-16L/146-02H)

* Mar 10-yr futures down 7.5/32 at 121-23 (121-21L/121-31.5H)

* Mar 5-yr futures down 6/32 at 114-12.5 (114-11.5L/114-18.25H)

* Mar 2-yr futures down 2.38/32 at 105-31.12 (105-30.88L/106-01.5H)

US TSY FUTURES: *** Late roll update, slowly gaining momentum. June takes lead

from March later in month (first notice February 28). Volumes still running

light, but expect a sharp increase this week. March future's staggered

expiration on March 20 for 10s, 30s and Ultras, and March 29 for 2s and 5s.

Latest volume:

* TUH/TUM appr 62,200 from -3.50 to -2.88, -2.88 last; 10% complete

* FVH/FVM appr 18,000 from -3.50 to -3.25, -3.25 last; 5% complete

* TYH/TYM appr 12,000 from -9.00 to -8.50, -8.75 last; 3% complete

* USH/USM appr <100 from 19.75-20.0, 20.00 last; 2% complete

* WNH/WNM appr 2,300 from -1-6.25 to -1-5.50, -1-6 last; 3% complete

US EURODLR FUTURES CLOSE: Weaker across the strip, near session lows, decent

range on good volume for an otherwise quiet session. Heavy selling in EDZ9

earlier. Current White pack (Mar'19-Dec'19):

* Mar'19 -0.005 at 97.355

* Jun'19 -0.015 at 97.350

* Sep'19 -0.025 at 97.330

* Dec'19 -0.040 at 97.295

* Red pack (Mar'19-Dec'20) -0.045-0.055

* Green pack (Mar'20-Dec'21) -0.050-0.035

* Blue pack (Mar'21-Dec'21) -0.035-0.020

* Gold pack (Mar'22-Dec'22) -0.025-0.020

US DOLLAR LIBOR: Latest settles

* O/N +0.0008 to 2.3843% (-0.0014/wk)

* 1 Month -0.0050 to 2.4887% (-0.0154/wk)

* 3 Month -0.0091 to 2.6837% (-0.0140/wk)

* 6 Month +0.0027 to 2.7432% (+0.0014/wk)

* 1 Year +0.0005 to 2.9157% (-0.0200/wk)

US TSYS: *** /REPO REFERENCE RATES: (rate, volume) 

* Secured Overnight Financing Rate (SOFR): 2.49%, $920B

* Broad General Collateral Rate (BGCR): 2.36%, $465B

* Tri-Party General Collateral Rate (TGCR): 2.36%, $441B

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

14-Feb 0830 09-Feb jobless claims (234k, 227k)

14-Feb 0830 Jan Final Demand PPI (-0.2%, 0.1%)

14-Feb 0830 Jan PPI ex. food and energy (-0.1%, 0.2%)

14-Feb 0830 Jan PPI ex. food, energy, trade (0.0%, --)

14-Feb 0830 Dec retail sales (0.2%, 0.1%)

14-Feb 0830 Dec retail sales ex. motor vehicle (0.2%, 0.0%)

14-Feb 0830 Dec retail sales ex. mtr veh, gas (0.5%, --)

14-Feb 1000 Nov business inventories (0.6%, 0.2%)

14-Feb 1030 08-Feb natural gas stocks w/w

14-Feb 1100 Phi Fed Pres Harker "Approaches to Leadership", DE, Q&A

14-Feb 1630 13-Feb Fed weekly securities holdings

PIPELINE: $2B Export Development Canada 5Y priced, $2.8B Tyson launched

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

02/13 $5B #ATT $3B 10Y +170, $2B 20Y +220

02/13 $2.8B #Tyson $800M 7Y +145, $1B 10Y +165, $1B 30Y +230

02/13 $1.5B #Goldman Sachs 5Y +112.5

02/13 $1.5B #Boeing WNG $400M 5Y +47, $400M 10Y +67, $400M 20Y +77, $300M 40Y

+102

02/13 $1.05B #Welltower $500M 5Y +117, $550M 10Y +147

02/13 $3B *EIB WNG 3Y +3 

02/13 $2B *Export Development Canada 5Y +9

Eurodollar/Treasury Option Summary 

Eurodollar options, Pit/screen:

* +15,000 short Jul 67/70 put spds 1.5

* -20,000 short Mar 76 calls, 1.0

* -5,000 Green Jun 75/78 2x3 call spds, 16.5

* +3,000 Dec 66/67/70/71 put condors, 3.0

* +4,000 May 73/75 1x2call spds, 1.25

* +5,000 Jun 70/71/72 put flys, 1.0

* +15,000 short Apr 73/75/76 call flys, 2.5-3.0

Block, 1137:03ET,

* 15,000 Jun 73 straddles, 10.5 vs.

* 10,000 Jul 73 straddles, 17.0

* -20,000 short Mar 76 calls, 1.0

* +10,000 short Apr 73/75/76 put flys, 3.0 vs. 97.39/0.10/0.10%

* +10,000 Mar 71 puts, 2.0

* +3,500 Jun 72/73/75 1x3x2 call flys, 3.0

* short Feb 73/75 strangle trading at 2.5 -- expires Friday

Block, 0912:36ET,

* +10,700 long Green Sep'21 90 calls, 8.5 vs.

* -21,400 long Green Sep'21 100 calls, 1.5, 5.5 net package

* 4,000 Red Mar'20 66/68 3x2 put spds, 3.0 vs. 97.37

* 4,000 Dec 73 straddles, 41.0

* +4,000 Jun 70/71/72 put flys, 1.0

* +10,000 short Feb 75 calls, 0.5 (Feb expires Friday)

Tsy options, Pit/screen:

* +28,000 FVK 111.5 puts, 1/64, still offered

* +35,000 TYK 128 calls, 2/64 lifted screen offer, total volume 49.5k

* -5,000 TYH 121.5 puts, 5/64

* -4,000 FVH 114 puts, 1.5/64

* 2,000 TYH 123/123.5/124 call trees, 0.0

* 1,950 TYM 119.5/121.5 put spds, 33/64

* 2,000 FVH 114.25/115.25 call spds, 14/64 vs. 114-12.5

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

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