US TSYS: FED MINUTES GIVE BALANCED TO DOVISH TONE

US TSY SUMMARY: Tsy trading mixed with the short end outperforming; strong

volume (TYH 1.24M); Curves steeper.

-The FOMC Minutes came off balanced to dovish revealing a more cautious outlook

on the Funds Rate; treasuries had little reaction while equities firmed even

higher on the release

-Fed speakers spoke throughout the day starting with Fed's Bostic who said,

"*FED'S BOSTIC SAYS NEXT RATE MOVE COULD BE UP OR DOWN-bbg" sending the US

Dollar in waterfall formation; Fed's Evans spoke stating, "*EVANS SAYS FED `AT A

PRETTY GOOD PLACE IN TERMS OF POLICY'" and "DEC. DOT PLOT HAD RATES IN

RESTRICTIVE TERRITORY END-'19" causing a bounce in equities.

-As trade talks wrapped, "*USTR: CHINA PLEDGED TO BUY MORE U.S. AGRICULTURE,

OTHER GOODS-bbg" and "*U.S., CHINA DISCUSSED FAIRNESS, RECIPROCITY-bbg"

-Equities higher (emini +19.50, 2592.00); WTI slipped on EIA data but remains

higher (WTI +2.53, 52.31), DXY down (-.707, 95.196); $/Eur +0.0105 at 1.1546,

$/Yen -0.47 108.28; Gold (XAU +6.64, 1291.84) -Tsy cash/ylds: 2Y 99-27.75

(2.567%), 5Y 100-8.25 (2.568%), 10Y 103-10 (2.737%), 30Y 106-21.5 (3.033%).

US TSY FUTURES CLOSE: Tsy trading mixed with the short end outperforming, long

end near session lows; strong volume (TYH 1.24M); Curves steepening; update:

* 2s10s +2.792, 16.627 (13.101L/16.985H);

* 2s30s +4.451, 46.370 (41.398L/46.599H);

* 5s30s +3.971, 46.534 (42.302L/46.886H);

Current futures levels:

* Mar Ultra bonds down -1-02/32 at 160-10 (160-07L/161-06H)

* Mar 30-yr Bond futures down 18/32 at 145-15 (145-11L/145-29H)

* Mar 10-yr futures down 03/32 at 121-21 (121-16L/121-27.5H)

* Mar 5-yr futures up 01/32 at 114-11.75 (114-6.75L/114-15.25H)

* Mar 2-yr futures up 1.25/32 at 105-31.75 (105-29.5L/106-01H)

     US EURODOLLAR FUTURES CLOSE: Golds trading mixed as the rest of the strip

trades slightly to mildly higher; strong volume. Current White

pack(Mar'19-Dec'19):

* Mar'19 +0.005 at 97.295

* Jun'19 +0.010 at 97.280

* Sep'19 +0.015 at 97.300

* Dec'19 +0.010 at 97.305

* Red pack (Mar'19-Dec'20) +0.025-0.010

* Green pack (Mar'20-Dec'21) +0.025-0.020

* Blue pack (Mar'21-Dec'21) +0.020-0.015

* Gold pack (Mar'22-Dec'22) +0.005-0.015

US DOLLAR LIBOR: Latest settles,

* O/N -0.0005 to 2.3908% (-0.0032 wk)

* 1 Month +0.0033 to 2.5188% (-0.0017 wk)

* 3 Month +0.0164 to 2.7989% (-0.0050 wk)

* 6 Month +0.0172 to 2.8698% (+0.0140 wk)

* 1 Year +0.0229 to 3.0390% (+0.0741 wk)

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

* Secured Overnight Financing Rate (SOFR): 2.42% vs. 2.41% prior, $1.070T

* Broad General Collateral Rate (BGCR): 2.40% vs. 2.38% prior, $451B

* Tri-Party General Collateral Rate (TGCR): 2.40% vs. 2.38% prior, $434B

US SWAPS: Latest spd levels:

* 2Y +1.19/14.44

* 5Y +0.08/7.25

* 10Y -0.08/2.55

* 30Y -0.95/-16.80

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

10-Jan 0830 05-Jan jobless claims (220k, 215k)                              

10-Jan 1000 Nov wholesale inventories (0.8%, --)                            

10-Jan 1000 Nov wholesale sales (-0.2%, --)                                 

10-Jan 1030 04-Jan natural gas stocks w/w (-20Bcf, --)                      

10-Jan 1230 StL Fed Pres Bullard, econ outlook/mon-pol, AR, Q&A             

10-Jan 1300 US Tsy $16B 30Y bond auction (912810E9)                         

10-Jan 1300 Chi Fed Pres Evans, Milwaukee Bizz Jrnl Econ Forecast, Wi Q&A   

10-Jan 1630 09-Jan Fed weekly securities holdings                           

     PIPELINE: *** LAUNCH: $7.5b #Saudi Arabia in 2-parts

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

1/09  $7.5b #Saudi Arabia, $4b Long 10Y +175, $3.5b 31Y +230

1/09  $3.25b *IADB 5Y MS +10

1/09  $Benchmark Danske Bank Snr Non-pref, 3Y +255, 5Y +285

-

3.25b Priced Today

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* 6,000 Short Mar 68/71 put sprd at 2.5 vs 9734/0.15%

* +10,000 Jun 72/73 call sprd at 1 over the Apr 72/73 call sprd vs 9723.5/0.10%

BLOCK

* Total +60,000 Mar 73/75 call sprd at 1 vs 9727.5/0.15%   

* -20,000 Sep 72 Straddle at 27 BLOCK

* 40,000 Sep 70 puts at 4 BLOCK

* -10,000 Short Sep 76/80 call sprd at 9

* -10,000 Green Mar 75 Straddle at 26 vs 45.5/0.10%

* +10,000 Short Feb 73 puts at 10.5 vs 35/0.54%

* 10,000 Short Mar 71/73 2x1 put sprd vs 75 calls at 0, buying the put sprd,

selling the calls

* Total +20,000 Jun 72/73 call sprd at 0.75 over the Apr 72/73 call sprd, adds

to earlier block traded at 1

* -25,000 Short Mar 68/71 2x1 put sprd at 1.5

* 8,250 Short Mar 66/68 2x1 put sprd at 0.5 vs 9733/0.05%

* +10,000 Short Mar 66/68 2x1 put sprd at 0.5 vs 33/0.05%

* -15,000 Mar 72 Straddles at 8.5 BLOCK

     US TSY OPTIONS

US TSY OPTIONS: Latest trade,

* +2,200 TYH 125/127 call sprd at 2 vs 20/0.05%

* -3,000 FVH9 114.75 calls to buy +6,000 FVG9 114.75 calls at 0   

* +2,600 TYH9 120.5 puts at 14 vs 21/0.20%

* +2,000 TYH9 121 puts at 24 vs 18.5/0.10%

--MNI Chicago Bureau; +1 630-698-0154; email: ryan.martin@marketnews.com

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