US TSYS: CAUTIOUS RISK-ON, 10YY OVER 3%, EQ'S SURGE W/CRUDE

US TSY SUMMARY: Rates holding weaker levels by the bell, off early lows on

moderate volume (TYM appr 1M); 10YY>3.0%. US$ index pared gains (DXY -.058,

93.062; US$/Yen 109.718); equities stronger (emini +27.0, 2697.25) as West Texas

crude vaults to new high of 71.36 (late 2014 lvls), currently +2.10, 71.16; gold

weaker (XAU -2.16, 1312.39).

- Pretty quiet trade on net, focus on Thu's CPI (0.2% m-o-m/est) after PPI

climbed 0.1%, suggests inflation slowed after strong Mar showing; Mar wholesale

inv +0.3%, below the +0.5% in the adv est. Atl Fed Pres Bostic: inflation likely

to run above 2% "for a while". Bostic added that concerns of trade war between

US and allies were "overshadowing" positive effect of "tax cuts".

- Two-way flow after better early selling in long end, modest deal-tied flow,

pre-auction short set/unwind. Decent option volume on mixed trade that favored

downside put buying over calls, particularly in late 2020 sector of curve.

- $25B 10Y auction awarded 2.995% rate (2.795% in April after March auction

awarded 2.889%); 10YY tapped 3.0117% O/N. Quiet second half trade

- Tsy ylds: 2Y 2.530%, 3Y 2.682%, 5Y 2.838%, 7Y 2.957%, 10Y 3.002%, 30Y 3.156%

US TSY FUTURES CLOSE: trading weaker, off session lows. Curves steepening late,

update:

* 2s10s +0.760, 47.009 (48.801H/45.807L);

* 2s30s +0.750, 62.356 (64.415H/61.118L);

* 5s30s +0.014, 31.542 (32.720H/30.883L);

Current futures levels:

* Jun Ultra bonds down 28/32 at 155-18 (155-11L/156-10H)

* Jun 30-yr Bond futures down 24/32 at 142-20 (142-15L/143-09H)

* Jun 10-yr futures down 9/32 at 119-08 (119-06L/119-15H)

* Jun 5-yr futures down 4.25/32 at 113-08.75 (113-08L/113-12.5H)

* Jun 2-yr futures down 1.25/32 at 105-30.25 (105-30.25L/105-31.75H)

US EURODOLLAR FUTURES CLOSE: trading mostly weaker, Blues and

Golds under-performing rest of strip. Current White pack (Jun'18-Mar'19):

* Jun'18 +0.005 at 97.630

* Sep'18 -0.005 at 97.490

* Dec'18 -0.010 at 97.330

* Jun'19 -0.020 at 97.210

* Red pack (Jun'19-Mar'20) -0.020-0.025

* Green pack (Jun'20-Mar'21) -0.030-0.025

* Blue pack (Jun'21-Mar'21) -0.035-0.030

* Gold pack (Jun'22-Mar'22) -0.040

US DOLLAR LIBOR: Latest settles, Latest settles,

* O/N +0.0000 to 1.7050% (-0.0006/wk)

* 1 Month +0.0000 to 1.9285% (+0.0008/wk)

* 3 Month +0.0032 to 2.3557% (-0.0133/wk)

* 6 Month -0.0056 to 2.5181 (-0.0021/wk)

* 1 Year +0.0000 to 2.7709% (-0.0057/wk)

REPO REFERENCE RATES: (rate, volume)

* Secured Overnight Financing Rate (SOFR): up to 1.72% from 1.71% prior, $746B

* Broad General Collateral Rate (BGCR): up to 1.68% vs. 1.67% prior, $342B

* Tri-Party General Collateral Rate (TGCR): up to 1.68% vs. 1.67% prior, $330B

US SWAPS: Spds holding tighter by the bell, compressing to session lows after

10Y auction. Recent flow includes rate paying in 3s (2.877%) and 5s (2.94967),

5s10s steepeners, mixed fly interest: $267k 3Y-5Y-9Y Fly, paying the belly and

$292.2k 3Y-5Y-10Y Fly, receiving the belly. Early flow included $410mln payer of

USD 2Y at 2.78165%, smaller 3s5s spd steepener, $120.2k 2Y-3Y-4Y Fly and $186.2k

3Y-5Y-6Y Fly, both receiving the belly. Latest spd levels:

* 2Y  -0.94/25.00

* 5Y  -0.75/11.75

* 10Y -0.94/2.81

* 30Y -0.25/-10.25

PIPELINE: $4.5B Barclays 3-part priced late, waiting on $2B Caterpillar 4-part

launched

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

05/09 $4.5B *Barclays $1.25B 6NC5 fix/FRN +150, $1.5B 6NC5 +135, $1.75B 11NC10

fix/FRN +197

05/09 $2B #Caterpillar 4-part: 

      $650M 2Y fix +43, $600M 2Y FRN +18, 

      $500M 5Y fix +63, %250M 5Y FRN +51

05/09 $1.7B Centene Corp 8NC3 sr notes

-

$15.28B Priced Tuesday

05/08 $1.78B *Verizon 7Y FRN +110

05/08 $7.5B *General Dynamics 7-part:

      $2B 2Y fix +55, $500M 2Y FRN +29, $2B 3Y fix +60, %00M 3Y FRN +38

      $750M 5Y +65, $750M 7Y +77, $1B 10Y +85

05/08 $3B *Westpac Banking $750M 2Y fix +55, $500M 2Y FRN +28, $1B 5Y fix +85,

$750M Y FRN +72

05/08 $1.75B *Skandinaviska Enskilda Banken AB (SEB), $650M 3Y fix +65, $1.1B 3Y

FRN +43

05/08 $1.25B *Huntington, $750M 3Y fix +68, $500M 7Y +112.5

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

- May 10 05-May jobless claims (211k, 215k) 0830ET

- May 10 Apr CPI (-0.1%, 0.3%) 0830ET

- May 10 Apr CPI Ex Food and Energy (0.2%, 0.2%) 0830ET

- May 10 06-May Bloomberg comfort index 0945ET

- May 10 04-May natural gas stocks w/w (+62Bcf, --) 1030ET

- May 10 US Tsy $17B 30-Year Bond auction, May 15 settle, 1300ET

- May 10 Apr Treasury budget balance (-$208.7B, $173.5B) 1400ET

- May 10 09-May Fed weekly securities holdings  1630ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* 4,000 Mar 67/68/70 put fly at 1.5

* 3,000 Jul/Sep 75/77 call sprd/strip for total of 9 on package

* 5,000 Short Jun 72/73 1x2 call sprd at 0.5

UPDATE: Total 6,000 May 76 Straddle at 2 vs 9763/0.20%

* 10,000 Green Mar 65/75 Strangle at 15.5

* 10,000 Short Jun 72/73 call sprd at 1.5 vs 9715.5/0.10%

* 10,750 Dec 71/72/73 put fly at 2 vs 9738/0.05%

* 10,000 Aug 72/73 put sprd at 0.75 vs 9749.5/0.14%

* 3,000 May 76 Straddle at 2 vs 9763/0.20%

* 5,000 Short Dec 67/68/70 put fly at 0.5 over Short Dec 77 call

* 2,400 Blue Aug 68 Straddle at 26.5

Block, 0959:10ET, adds to 10k in pit

* 10,000 Green Dec 62/65 put spds 0.5 over the Green Dec 76 calls vs.

96.92/0.16%

UPDATE: Total 30,000 Green Dec 61/65/66 put tree at 1.5 vs 9689.5/0.05%

* 10,000 Short Jun 70 put at 2 vs 9708/0.10%

* 4,000 Sep 73/75 2x1 put sprd at 3.5 vs 9749.5/0.10%

* 6,000 Jun 76/77 1x2 call sprd at 2

* 2,000 Jun 76 Straddle at 6

* 7,000 Dec 80 calls at 0.5 vs 9733.5/0.02%

* 20,000 Green Dec 61/65/66 put tree at 1.5 vs 9689.5/0.05%, adds to 25k

yesterday

* 2,000 Red Jun 65 puts

Tsy options, Pit/Screen:

* +20,000 TYN/TYU 120 call spds, 20/64 on screen

* 4,000 TYM 117.75/119.25 2x1 put spds on screen recently, 15/64 net

* 1,400 TYM 118.25 puts, 6/64 follows up

* 1,000 USQ 143/144/147 broken call trees, 1/64

* 1,100 TYM 118/119 2x1 put spds, 8/64

* 2,000 wk2 10Y 119 puts, 6/64 vs. 119-08.5 earlier

* +3,700 TYM 118.25/119.25 put spds, 18/64 vs. 119-08/0.35%

Note, on yesterday's 44,500 TUN 106.2/106.3 call spds OI up like amount to appr

106k each strike now (paper bought like amount in the 106.5/106.6 call spds in

past, have moved down in strike).

* 2,000 USM 134/150 call over risk reversals, 1/64

* -7,000 TYM 119.25 straddles from 49- to 49/64

* 10,000 TYM 119.5 calls, 16/64 on screen (decent volume Tue in TYM 119.75

calls, same premium)

* 2,500 FVM 113/113.25 put spds, 5.5/64

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

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