US TSYS: FED BULLARD COVID-19 RISK TO OUTLOOK; KASHKARI IS NOT

US TSY SUMMARY: Choppy day for Tsys, futures see-sawed weaker, near middle

session range, more than making up for Mon's rally as concern over spd of newly

named "COVID-19" virus inexplicably cooled overnight. 

- Fed speakers weighed in: StL Fed Pres Bullard said outlook could be altered as

outbreak risk threatens soft landing; Mn Fed Pres Kashkari: virus outbreak isn't

a major risk to the U.S. economy; while Fed Chair Powell will be "closely

monitoring emergence of coronavirus."

- More from Fed chair: current stance of monetary policy will support continued

growth, a strong labor market, and inflation returning to the 2% target, Powell

said. Round two for Powell Wednesday.

- Several TYH block sales, some vs. Bunds, "catalyzed" after dovish MNI sources

story "Chances Rise Of ECB Rate Cut On Data, Coronavirus" made the rounds.

- Midday risk-on unwind after Bbg headline "FTC TO EXAMINE PAST ACQUISITIONS BY

LARGE TECHNOLOGY COMPANIES" spooked markets. The 2-Yr yield is up 2bps at

1.4133%, 5-Yr is up 2bps at 1.4076%, 10-Yr is up 1.9bps at 1.5885%, and 30-Yr is

up 1.4bps at 2.053%.

TECHNICALS:

US 10YR FUTURE TECHS: (H0) Downside Focus 

*RES 4: 132-02+ High Oct 3 and Oct 7 and key resistance

*RES 3: 131-29 Feb 3 high

*RES 2: 131-20+ High Feb 4

*RES 1: 131-16+ 76.4% retracement of the Feb 3 - Feb 6 decline 

*PRICE: 131-00+ @ 16:29 GMT, Feb 11

*SUP 1: 130-07   Low Jan 29 and key near-term support

*SUP 2: 129-28+ 50-day EMA

*SUP 3: 129-17+ Low Jan 23

*SUP 4: 129-12   Low Jan 22 

10yr futures  are traded lower Tuesday. Sharp losses last week are expected to

continue to weigh on prices and the recent recovery is most likely a correction.

Last week futures cleared support at 130-30, the Jan 31 low and 130-13+, Jan 29

low signaling scope for a deeper pullback towards 129-28+, an area of support

highlighted by the 50-day EMA. The recent sell-off marks an unwinding of the

overbought condition. Initial resistance is at 131-16+.

AUSSIE 3-YR TECHS: (H0) Minor Dip

*RES 4: 99.549 - 123.6% Fib projection of January rally

*RES 3: 99.460 - High Oct 7

*RES 2: 99.455 - High Feb 2

*RES 1: 99.415 - Upper 2% Bollinger Band

*PRICE: 99.280 @ 15:56 GMT Feb 11

*SUP 1: 99.200 - Low Jan 16

*SUP 2: 99.180 - Low Jan 10, 14 and 14 and near-term key support

*SUP 3: 99.085 - Low Jan 3

*SUP 4: 99.055 - Low Dec 31 and primary support

Aussie bonds took a minor dip Tuesday, but the moves have done little to change

the over-arching technical picture. This keeps downside focus on near-term

support at 99.200. Upside momentum from the most recent cycle high has now been

drained from the market, which retains significant resistance at the 99.460

mark. A break through here would open Fib projections at 99.512. Another turn

lower would instead resume attention on the key support at 99.18, the Jan 10, 14

and 15 low.

AUSSIE 10-YR TECHS: (H0) Settles Lower

*RES 3: 99.1700 - High Aug 16

*RES 2: 99.1550 - High Oct 9

*RES 1: 99.1200 - High Feb 4

*PRICE: 98.9600 @ 16:20 GMT, Feb 11

*SUP 1: 98.7150 - Low Jan 14 and key near-term support 

*SUP 2: 98.5900 - Low Jan 3 

*SUP 3: 98.5700 - Low Jan 2 and primary support

Aussie 10yr futures settled at the lower end of the recent range Tuesday. This

keeps the technical picture broadly unchanged. To the downside, the initial

focus is on 98.7150, Jan 14 low where a break is required to signal a fresh

round of stronger bearish pressure. 98.8600 is a key downside risk parameter. To

the upside, bulls must close above the 99.1200 mark to narrow the gap with

alltime highs.

JGB TECHS: (H0): 50-dma Remains Key Support

*RES 3: 153.55 - High Nov 28 and key resistance

*RES 2: 153.24 - 100-dma

*RES 1: 153.13 - High Jan 31

*PRICE: 152.85 @ 16:28 GMT, Feb 11

*SUP 1: 152.37 - 50-dma

*SUP 2: 151.62 - Contract lows, Dec 20

*SUP 3: 151.11 - 76.4% retracement of August 2018 - September 2019 Rally

JGBs recovered further Tuesday as sentiment remains shaky across Asian markets.

This keeps the 50-dma as support on a closing basis. To re-ignite bullish

momentum, a break and close above the 100- and 200-dmas layered just above would

shift the outlook nicely positive, but the risk of a pullback still looms large

at present levels. For bears to recapture any momentum, a close below the 50-dma

would be needed, opening 151.62 and the 151.11 mark beyond.

TSY FUTURES CLOSE: Choppy day for Tsys, futures see-sawed to near middle of

lower session range, more than making up for week opener's rally. Yld curves

mostly flatter, 3M10Y manages to dis-invert. Update:

* 3M10Y  +1.074, 0.894 (L: -0.478 / H: 2.523)

* 2Y10Y  -0.249, 17.004 (L: 16.579 / H: 17.865)

* 2Y30Y  -0.881, 63.299 (L: 62.761 / H: 64.312)

* 5Y30Y  -0.897, 64.029 (L: 63.327 / H: 64.673); Current futures levels:

* Mar 2-Yr futures down 2.125/32 at 108-0.125 (L: 107-31.25 / H: 108-01.375)

* Mar 5-Yr futures down 5.75/32 at 119-29 (L: 119-26 / H: 119-31.75)

* Mar 10-Yr futures down 10/32 at 131-1.5 (L: 130-28.5 / H: 131-06)

* Mar 30-Yr futures down 19/32 at 162-18 (L: 162-05 / H: 162-25)

* Mar Ultra futures down 29/32 at 192-24 (L: 192-04 / H: 193-05)

US TSY FUTURES: Late Mar/Jun futures roll update. Friday, February 28 is first

notice (June futures take lead quarterly position). March futures don't expire

until mid-late March (10s, 30s and Ultras on 3/20, 2s & 5s 3/31). Session volume

and % complete update:

* TUH/TUM appr 29,300 from -5.88 to -5.62, -5.75 last; 10% complete

* FVH/FVM appr 40,700 from -12.5 to -12.00, -12.25 last; 7% complete

* TYH/TYM appr 17,70 from 4.0 to 4.25, 4.25 last; 5% complete 

* UXYH/UXYM <1,000 from 10.25 last 

* USH/USM appr 5,600 from 30.5 to 30.75, 30.5 last; 9% complete

* WNH/WNM appr 9,400 from -25.0 to -24.25, -24.5 last; 7% complete

US EURODLR FUTURES CLOSE: Reversing Mon's move, futures weaker across the strip

by the bell, near middle session range as pandemic concerns cool slightly.

Current White pack (Mar'20-Dec'20):

* Mar 20 -0.025 at 98.340

* Jun 20 -0.035 at 98.450

* Sep 20 -0.035 at 98.545

* Dec 20 -0.040 at 98.590

* Red Pack (Mar 21-Dec 21) -0.04

* Green Pack (Mar 22-Dec 22) -0.04

* Blue Pack (Mar 23-Dec 23) -0.04 to -0.035

* Gold Pack (Mar 24-Dec 24) -0.035

US DOLLAR LIBOR: Latest settles

* O/N -0.0034 at 1.5712% (-0.0061/week)

* 1 Month -0.0051 to 1.6528% (-0.0125/wk)

* 3 Month -0.0059 to 1.7072% (-0.0236/wk)

* 6 Month +0.00039 to 1.7245% (-0.0158/wk)

* 1 Year +0.0066 to 1.8071% (-0.0277/wk)

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

* Daily Effective Fed Funds Rate: 1.58%, volume: $69B

* Daily Overnight Bank Funding Rate: 1.58%, volume: $185B

US TSYS: REPO REFERENCE RATES:

* Secured Overnight Financing Rate (SOFR): 1.58%, $1.111T

* Broad General Collateral Rate (BGCR): 1.56%, $427B

* Tri-Party General Collateral Rate (TGCR): 1.56%, $415B

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

12-Feb 0700 07-Feb MBA Mortgage Applications (5.0%, --)

12-Feb 1030 07-Feb crude oil stocks ex. SPR w/w

12-Feb 1400 Jan Treasury budget balance (-$13.3B, -$10.0B)

PIPELINE: Novartis launched $5B total

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

02/11 $5B #Novartis Capital Corp $1B 5Y +37, $1.25B 7Y +50, $1.5B +10K +62,

$1.25B +30Y +80

02/11 $1.1B #DTE Electric $600M 10Y +68, $500M 30Y +90

02/11 $1B #Sysco WNG 10Y +85, 30Y +125

02/11 $300M *Oshkosh WNG 10Y +155

02/11 $325M *Duke Realty 30Y +112

02/11 $1B Post Holdings 10.25NC5

02/11 $1B HCA Inc. 10.5NCL

Eurodollar/Tsy options 

Eurodollar options:

* 6,000 Apr/Jun 85 call spds 3.0 vs.98.475

* -4,000 Dec 83/85 2x1 put spds, 1.0

* Update, >-21,000 short Mar 83/85/86 call flys 2.5-2.0

Volume trade fairly subdued, additional first half trade includes

* +6,000 short Mar/short Jun 81/82/90/91 call condor strip, 22.0 (ongoing theme

after dealer +10k Sep/Dec 81/82/90/91 call condor strip Monday for 19.0)

* +5,000 Jun 83/87 call spds, 9.5 vs. 98.455/0.40%

* +10,000 short Feb 86/87 call spds, 6.5

* +8,000 Jun 83/Jun 82/short Jun 86 put strip, 15.75

* +5,000 short Sep 87 straddles 2.5 over Dec 86 straddle

* -5,000 Jun 83/87 call spds, 9.5 vs. 98.455/0.46%

* -6,000 short Mar 83/85/86 call flys 2.5

* +2,500 Mar 83/85/86 call flys, 1.0

* +3,000 short Apr 87/88/90 call trees, 0.0

* Update, >-8,000 Apr/Jun 85 call spds, 3.0 Jun over

* 6,248 Jun 82 calls, 21.5 vs.

* 7,810 Jun 83 calls 13.0 vs. 98.45 vs. short Jun 83 puts 2.0 vs. 98.71

* 2,500 Feb 83/Mar 85 call spds, 3.0

Other salient trades, screen, blocks

* total 40,000 (25k screen) Dec 95 calls, 2.0

* Mar 82 puts continue to draw decent bid, just over 46,000 on screen at 0.5,

total volume near 107,000 tied to the earlier 20,000 Mar 82/83 3x1 put spd Block

at 3.0

* 26,000 short Feb/short Mar 87 call spds, 4.5

* 18,000 Sep 87/88/90/91 call condors

* 18,000 May 82 puts, 0.5

Tsy options:

* Update, near -20,000 TYM 128.5/130.5 2x1 put spds, 23/64 vs. 130-27

* -5,000 TYJ 129/133.5 strangles, 18/64

* +1,000 TYH 131.5/132 1x2 call spds, 0.0

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

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