US TSYS: Eq's Off Lows, Senate Passes House Virus Bill

US TSY SUMMARY: Another round of heavy selling in equities (S&P cash low 2262.0,

well below Dec 26, 2018 gap low of 2346.0) as well as Tsys, several circuit

breakers triggered through the day.

- Both rates and equities bounce late, however, coinciding with Senate passing

House virus response bill after the NY close. House advisor Kudlow also

suggested "GOVERNMENT MIGHT TAKE EQUITY POSITION AS PART OF AID" Bbg.

- Sources also note day saw "biggest 7-day gain for the US Dollar since Black

Wednesday in 1992." Meanwhile, Brent crude futures fell below $25/bbl for the

first time since 2003.

- Short end rates outperformed, yld curves surged, 3M10Y around 2 year highs at

123.653 only a couple weeks after trading inverted around -29.0!

- The 2-Yr yield is up 4.1bps at 0.5337%, 5-Yr is up 4.5bps at 0.7879%, 10-Yr is

up 11.3bps at 1.1915%, and 30-Yr is up 10.3bps at 1.7875%.

TECHNICALS:

US 10YR FUTURE TECHS: (M0) Volatile And Weaker 

*RES 4: 139-07   High Mar 12

*RES 3: 138-30+ High Mar 16

*RES 2: 138-04   High Mar 17 

*RES 1: 136-00+ Intraday high 

*PRICE: 135-04 @ 16:14 GMT, Mar 18

*SUP 1: 134-02+ Intraday low  

*SUP 2: 133-14   Low Feb 28

*SUP 3: 133-02+ 50-day EMA

*SUP 4: 132-18+ Low Feb 26

10yr futures remain volatile and lower Wednesday. The contract has traded

through a support highlighted the 20-day EMA paving the way for a deeper move

lower in what is being viewed as a much needed correction. The focus is on

133-14, Feb 28 low and potentially a test of the 50-day EMA currently at

133-02+. The latter is seen as a key support area. On the upside, initial

resistance is at the intraday high of 136.00+. 

     AUSSIE 3-YR TECHS: (M0) Still Trading Below The Mar 9 High 

*RES 4: 99.778 - 1.382 projection of Dec 31 - Feb 3 rally from Feb 6 low (cont)

*RES 3: 99.719 - 1.236 projection of Dec 31 - Feb 3 rally from Feb 6 low (cont)

*RES 2: 99.750 - High Mar 19 and the bull trigger

*RES 1: 99.680 - High Mar 13

*PRICE: 99.565 @ 15:32 GMT Mar 18

*SUP 1: 99.440 - Low Mar 16

*SUP 2: 99.300 - Recent low (cont)

*SUP 3: 99.225 - Low Feb 6 and 13 (cont)

*SUP 4: 99.180 - Low Jan 10, 14 and 15 (cont)

Aussie 3yr remains below the Mar 9 low. The recent pullback in price action is

considered corrective. This theme is seen likely to persist for now, unless

futures are able to trade above resistance at 99.680, Mar 13 high. A break of

the Mar 16 low would trigger deeper short-term losses and open the 99.300 level,

a recent low of the continuation chart. On the upside, clearance of 99.680 would

instead expose the key bull trigger at 99.75.

     AUSSIE 10-YR TECHS: (M0) Correction Extends 

*RES 3: 99.5598 - 1.236 projection of the Jan 2 -Feb 4 rally from Feb 13 low 

*RES 2: 99.4850 - High Mar 10 and bull trigger 

*RES 1: 99.2600 - High Mar 12

*PRICE: 98.7150 @ 15:42 GMT, Mar 18

*SUP 1: 98.6300 - Low Mar 18

*SUP 2: 98.5700 - Low Jan 2

*SUP 3: 98.1305 - 1.0% 10-dma envelope

Aussie 10yr futures remain in a short-term downtrend as the correction that has

unfolded off the Mar 10 high of 99.4850 appears likely to extend. The break of

the Mar 16 low at 98.8775 as well as the retracement support at 98.7848 has

weakened the outlook and opens early 2020 lows at 98.5700. On the upside, a

break of resistance at 99.3600, Mar 12 high is needed to ease the current

bearish risk and open the 99.4850 bull trigger, Mar 10 high. 

     JGB TECHS: (M0): Retreat Mode Cemented

*RES 3: 156.02 - High Mar 10 and key resistance 

*RES 2: 154.56 - High Mar 13

*RES 1: 153.50 - High Mar 16

*PRICE: 151.11 @ 15:52 GMT, Mar 18

*SUP 1: 151.02 - Low Mar 18

*SUP 2: 150.98 - Low Nov 29, 2018 (cont) 

*SUP 3: 150.00 - Psychological round number 

JGB futures remain vulnerable following the recent sharp sell-off that began off

the Mar 10 high of 156.02. Downside pressure cemented with the break of the

recent 151.52 low, which opens 150.98 next, the low on Dec 23 (cont) as well as

the psychological 150.00 handle further out. On the upside, initial resistance

is seen at 153.50, Mar 16 high.

TSY FUTURES CLOSE: Well off late session lows to near middle wide session range,

late block buys in 30Y and ultra-bond futures. Short end outperforming, yld

curves steeper, 3M10Y around 2 year highs. Latest levels

* 3M10Y  +26.256, 115.949 (L: 72.051 / H: 123.653)

* 2Y10Y  +6.331, 63.719 (L: 53.337 / H: 77.845)

* 2Y30Y  +3.821, 121.813 (L: 113.261 / H: 144.649)

* 5Y30Y  +3.213, 97.157 (L: 91.833 / H: 113.92); Current futures levels:

* Jun 2-Yr futures up 0.5/32  at 109-27.5 (L: 109-23.3 / H: 110-01.3)

* Jun 5-Yr futures down 16/32  at 123-14.75 (L: 123-08 / H: 124-02.5)

* Jun 10-Yr futures down 1-14/32  at 134-14.5 (L: 134-00.5 / H: 136-00.5)

* Jun 30-Yr futures down 3-0/32  at 170-20 (L: 167-05 / H: 174-20)

* Jun Ultra futures down 8-03/32  at 203-03 (L: 195-03 / H: 209-28)

RECAP NY Fed operational purchases for today 

* Tsy 7-20Y, $3.001B accepted, $9.539B submitted

* Tsy 4.5-7Y, $8.001B accepted, $21.583B submitted

* Tsy 2.25-4.5Y, $4.001B accepted, $14.488B submitted

* Tsy 0-2.25Y, $15.001B accepted, $31.488B submitted

* TIPS 1-7.5Y, $5.001B accepted, $10.470B submitted

* Tsy Bills 0-1Y, $5.001B accepted, $18.284B submitted

US EURODLR FUTURES CLOSE: Weaker after the bell but off late session lows, wide

ranges in front end. Current White pack (Jun'20-Mar'21): 

* Jun 20 -0.040 at 99.490

* Sep 20 -0.035 at 99.580

* Dec 20 -0.045 at 99.525

* Mar 21 -0.050 at 99.545

* Red Pack (Jun 21-Mar 22) -0.08 to -0.06

* Green Pack (Jun 22-Mar 23) -0.115 to -0.09

* Blue Pack (Jun 23-Mar 24) -0.12 to -0.115

* Gold Pack (Jun 24-Mar 25) -0.13 to -0.12

US DOLLAR LIBOR: Latest settles

* O/N +0.1217 at 0.3798% (-0.7050/week)

* 1 Month +0.0229 to 0.7729% (-0.0272/wk)

* 3 Month +0.0638 to 1.1157% (+0.2725/wk)

* 6 Month +0.0390 to 0.9520% (+0.1307/wk)

* 1 Year +0.0424 to 0.8618% (+0.0402/wk)

STIR: Federal Reserve Bank of New York EFFR for prior session:

* Daily Effective Fed Funds Rate: 0.25% vs. 1.10% Mon, volume: $85B

* Daily Overnight Bank Funding Rate: 0.20% vs. 1.10% Mon, volume: $201B

US TSYS: REPO REFERENCE RATES (rate, volume levels reflect prior session)

* Secured Overnight Financing Rate (SOFR): 0.54% vs. 0.26% Tue, $1.335T

* Broad General Collateral Rate (BGCR): 0.50% vs. 0.23% Tue, $516B

* Tri-Party General Collateral Rate (TGCR): 0.50% vs. 0.23% Tue, $481B

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

19-Mar 0830 Mar Philadelphia Fed Mfg Index (36.7, 8.0)

19-Mar 0830 14-Mar jobless claims (211k, 220k)

19-Mar 0830 Q4 current account balance (-$124.1B, -$108.6)

19-Mar 1030 13-Mar natural gas stocks w/w

19-Mar 1630 18-Mar Fed weekly securities holdings

PIPELINE: Exxon and Pepsi jumbos comprised more than half Tue's whopping $26.84B

issuance; GS snuck in late w/$2.5B 10Y, BoA priced late. 

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

03/18 Issuers back on sidelines as mkt stress continues

-

03/17 $8.5 *Exxon Mobil Corp $1.5B 5Y +225, $1B 7Y +230, $2B 10Y +240, $1.25B

20Y +250, $2.75B 30Y +260

03/17 $6.5B *PepsiCo $1.5B 5Y +160, $500M 7Y +180, $1.5B 10Y +180, $750M 20Y

+190, $1.5B 30Y +200, $750M 40Y +230

03/17 $3.5B *Verizon $750M 7Y +215, $1.5B 10Y +225, $1.25B 30Y +250

03/17 $3B *Bank of America 31NC30 fix/FRN +260

03/17 $2.5B *Goldman Sachs 10Y +300

03/17 $1B *Progressive $500M 10Y +225, $00M 30Y +245 

03/17 $800M *Oncor Electric Delivery $400M each 10Y +175, 30Y +205

03/17 $465M *Union Electric WNG 10Y +220

03/17 $575M *Consumers Energy 31Y +200 *upsized

Eurodollar/Tsy options 

Eurodollar options:

Block, 1447:03ET,

* 10,000 Sep 96/97 call spds, 6.0 vs. 99.595/0.20%

* +16,000 Apr 87 puts, 1.25

* near +20,000 short Apr 86/88, 0.5 (after near 27k short Apr 85/90 put spds

bout at 1.0 earlier)

Block, 0934:24ET,

* 15,050 short May 95/96/97 call trees, 5.0 net

* +20,000 Green Jun 72 puts, cab

* 6,250 Jun 82 puts, 0.75

* +4,500 short Apr 88 puts, 0.5

* 5,250 Sep 55 (yes 55 strike) trading as well

* +5,000 Blue Jun 86/92 strangles, 22.5

Latest Block, 0753-0830ET, with more trading on screen from 13.5-14.0

* total 25,000 Dec 95/97 call spds, 13.5

Overnight Blocks, trade recap

* BLOCK, 5,500 short Sep 93/96 1x2 call spds, 5.0 at 0737:05ET

* BLOCK, 1.0 net package: 29,500 Apr 95/96 1x2 call spds vs. 59,000 May 97 calls

vs. 99.56 at 0504-0516ET

* 10,650 May 87/88 put spds

* 4,000 Jun 91/95 put spds vs 97 calls

* 3,000 short Sep 91/92 2x1 put spds

* Jun 95/97 call spds vs. short Jun 97/98 continues

Tsy options:

* +26,000 FVK 101 puts, 3/64, new position

* +2,000 TYJ 136.5 calls, 29/64

* +18,900 FVK 109 puts, 2/64

* 5,000 TYJ 130/132.5 put spds, 7/64

* +3,200 TYJ 132/132.5 put spds, 2/64

Some overnight trade highlights

* 5,000 TYM 129.5/131 put spds, 11- to 12/64

* appr 5,000 TYJ 132/133/136 2x3x1 call flys

* -2,000 TYJ 133 puts, 10/64

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

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