US TSYS: FI PENDULUM SWING OTHER WAY, 50% RETRACE LONG END

US TSY SUMMARY: The FI pendulum swings other way Wednesday, sell-off initially

triggered early overnight on positive sounding "noise" re: phase 1 US/China

trade deal progress again. Sharp chop post ISM non-mfg: headline miss triggered

brief up-gap, then further weakness as mkt focused on decent improvement in

employment (55.5 NOV VS 53.7 OCT) and new orders (57.1 NOV VS 55.6 OCT)

components. Tsy futures holding rather narrow range/near lows since midday after

ratcheting off higher levels in early London trade. Yld curves rebound from

Tues' bull flattening.

- Swap spds running mixed by the bell, spd curve flatter all session vs. rebound

in Tsy yld curves. Modest flow included better payers in 2s and 5s, deal-tied

selling in the mix. 

- While correlation between ADP and NFP is limited at best, today's weaker than

exp ADP data (+67k vs. +140k est) has yet to spur any changes to dealer ests'

for Fri's Nov NFP (+128k prior vs. +190k est).

- The 2-Yr yield is up 4.4bps at 1.5822%, 5-Yr is up 6.1bps at 1.6031%, 10-Yr is

up 6.2bps at 1.7775%, and 30-Yr is up 6.3bps at 2.2264%.

TECHNICALS

US 10YR FUTURE TECHS: (H0) Rally Moderates

*RES 4: 131-03+ 76.4% of the Oct 7 - Nov 7 decline

*RES 3: 130-17+ High Nov 1 

*RES 2: 130-16   61.8% of the Oct 7 - Nov 7 decline

*RES 1: 130-04+ High Dec 3 and bull trigger

*PRICE: 129-15 @ 16:26 GMT, Dec 4

*SUP 1: 128-26   Low Dec 3

*SUP 2: 128-23+ Low Dec 2 and key near-term support

*SUP 3: 128-11+ Low Nov 13

*SUP 4: 128-03+ Low Nov 12

After a particularly impressive Tuesday session, 10yr futures moderated slightly

Wednesday, with underlying strength in US economic data helping dampen the

rally. Nonetheless, much of the rally has been maintained, retaining the

potential key turning point at 128-23+ (the week's low). Note, the pullback off

the Nov 21 high retraced to just below 61.8% of the climb between Nov 7 - Nov

21. The fact that the retracement has essentially remained in place, reinforces

the importance of this weeks bounce. Further gains would open 130-17+. Key

support is 123-23+.

AUSSIE 3-YR TECHS: (Z9) Modest Bounce

*RES 4: 99.472 - 123.6% Projection

*RES 3: 99.464 - 3.0% Upper Bollinger Band

*RES 2: 99.460 - Alltime High Oct 7 

*RES 1: 99.395 - High Nov 27

*PRICE: 98.280 @ 16:30 GMT Dec 4

*SUP 1: 99.165 - Low Nov 13

*SUP 2: 99.130 - Low Nov 12

*SUP 3: 99.070 - Low Nov 8 and key support

*SUP 4: 99.055 - 1.00 projection of Oct 8 - Oct 22 decline from Oct 25 high

After a drubbing on Monday, global bond markets staged a modest bounce Tuesday

which largely held in the Wednesday session. This keeps Aussie three-year

futures within the recent range. Nonetheless, focus remains on the recent lows

as the recent run-up to 99.395 now looks to be over. Prices trade either side of

the 99.30 level at present, denting the outlook materially. 99.165 seen as the

next key support.

AUSSIE 10-YR TECHS: (Z9) Looks More Stable After Bounce

*RES 3: 99.0436 - 2.0% Upper Bollinger Band

*RES 2: 99.0358 - 76.4% retracement of the Oct 8 - Nov 11 decline

*RES 1: 99.0150 - High Nov 28

*PRICE: 98.8750 @ 16:32 GMT, Dec 4

*SUP 1: 98.7679 - Former channel resistance 

*SUP 2: 98.6850 - Low Nov 13

*SUP 3: 98.6500 - Low Nov 8 and primary support

Aussie 10yr futures bounced well Tuesday, which largely held Wednesday. This has

given bears some pause for thought as prices look slightly more stable. It still

looks too soon to call for an extension of the recent recovery, however, after

markets rejected any major test on the mid-October highs in the first half of

last week. Nonetheless, prices show little sign of retreating much further with

former channel resistance-turned-support at 98.7679 holding for now. Momentum

will be needed before the outlook turns convincingly positive, with bulls

needing to reclaim 99.0150.

JGB TECHS: (Z9): Pullback Appears Limited

*RES 3: 154.68 - 1.0% 10-dma moving average

*RES 2: 153.93 - High Nov 6

*RES 1: 153.64 - High Nov 21

*PRICE: 152.55 @ 16:37 GMT, Dec 4

*SUP 1: 152.39 - Low Dec 4

*SUP 2: 152.30 - 3.0% Lower Bollinger Band

*SUP 3: 152.25 - Contract Lows

After clocking four sessions of lower lows, JGBs bounced slightly Tuesday, but

this was largely erased during the Wednesday session. This keeps the technical

picture broadly unchanged, although a further drop below the 152.39 mark will

tilt negative. For bulls to regain any composure, markets must top the Nov 6

high at 153.93.

US TSY FUTURES CLOSE: Weaker all session amid heavy volume (TYH>1.9M), holding

rather narrow range/near lows since midday after ratcheting off higher levels in

early London trade. Yld curves rebound from Tues' bull flattening. Update:

* 3M10Y  +8.496, 23.389 (L: 11.735 / H: 23.906)

* 2Y10Y  +1.966, 19.331 (L: 16.846 / H: 20.566)

* 2Y30Y  +2.130, 64.292 (L: 61.346 / H: 65.708)

* 5Y30Y  +0.285, 62.239 (L: 60.929 / H: 63.949)

Current futures levels:

* Mar 2-Yr futures down 3.5/32 at 107-25.75 (L: 107-25.50 / H: 107-29.75)

* Mar 5-Yr futures down 11.5/32 at 119-0.25 (L: 118-31.25 / H: 119-13)

* Mar 10-Yr futures down 18.5/32 at 129-14.5 (L: 129-12.5 / H: 130-03.5)

* Mar 30-Yr futures down 1-11/32 at 158-24 (L: 158-14 / H: 160-12)

* Mar Ultra futures down 2-12/32 at 186-23 (L: 186-07 / H: 189-19)

US EURODLR FUTURES CLOSE: Weaker all session, Reds-Golds retrace more than half

Tues' rally, Whites outperform. Current White pack (Dec 19-Sep 20):

* Dec 19 -0.002 at 98.120

* Mar 20 -0.025 at 98.30

* Jun 20 -0.045 at 98.40

* Sep 20 -0.065 at 98.475

* Red Pack (Dec 20-Sep 21) -0.085 to -0.07

* Green Pack (Dec 21-Sep 22) -0.085

* Blue Pack (Dec 22-Sep 23) -0.09 to -0.08

* Gold Pack (Dec 23-Sep 24) -0.085 to -0.075

US SWAPS: Spds running mixed by the bell, spd curve flatter all session vs.

rebound in Tsy yld curves. Modest flow included better payers in 2s and 5s,

deal-tied selling in the mix. Current levels:

Time (ET)   2Y Swap/Mid    5Y Swap/Mid   10Y Swap/Mid   30Y Swap/Mid

Wed 1500    +1.00/+1.81    +0.19/-3.06   -0.06/-7.62    -0.12/-33.88

1330        +0.81/+1.62    +0.38/-2.88   +0.25/-7.31    -0.12/-33.88

1130        +1.19/+2.00    +0.56/-2.69   +0.31/-7.25    +0.25/-33.50

Wed Open    +0.50/+1.31    +0.06/-3.19   -0.12/-7.69    +0.00/-33.75

Wed 0715    +0.31/+1.12    +0.00/-3.25   -0.25/-7.81    +0.00/-33.75

Tue 1500    -1.06/+1.31    +0.12/-3.12   +0.19/-7.56    +0.38/-33.75

US DOLLAR LIBOR: Latest settles

* O/N -0.0090 at 1.5295% (-0.0130/wk)

* 1 Month +0.0095 to 1.7131% (+0.0159/wk)

* 3 Month -0.0044 to 1.8871% (-0.0184/wk)

* 6 Month -0.0079 to 1.8875% (-0.0090/wk)

* 1 Year -0.0196 to 1.9170% (-0.0351/wk) 

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

* Daily Effective Fed Funds Rate: 1.55%, volume: $76B

* Daily Overnight Bank Funding Rate: 1.55%, volume: $160B

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

* Secured Overnight Financing Rate (SOFR): 1.55%, $1.050T

* Broad General Collateral Rate (BGCR): 1.51%, $422B

* Tri-Party General Collateral Rate (TGCR): 1.51%, $396B

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

05-Dec 0730 Nov challenger layoff plans (33.5%, --)

05-Dec 0830 30-Nov jobless claims (213k, 215k)

05-Dec 0830 Oct trade balance (-$52.5B, -$48.5B)

05-Dec 1000 Oct factory new orders (-0.6%, 0.3%)

05-Dec 1000 Oct factory orders ex transport (-0.1%, --)

05-Dec 1000 Fed VC Quarles testimony before Senate Banking Comm

05-Dec 1030 29-Nov natural gas stocks w/w

05-Dec 1130 US TSYS TBA 4W Bill auction (912796WM7)

05-Dec 1130 US TSYS TBA 8W Bill auction (912796WR6)

05-Dec 1500 Nov Treasury STRIPS Holdings

05-Dec 1630 04-Dec Fed weekly securities holdings

PIPELINE: PNC Bank launched --

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

12/04 $1.75B #SEB $1.25B 3Y +62, $500M 3Y FRN L+64.5

12/04 $1.4B #PNC Bank $650M 3NC2 +45, $750M 3NC2 FRN L+43

12/04 $750M #Broadbridge WNG 10Y +115

12/04 $500M SEK (Swedish Export Credit) 4Y +18a

12/04 $500M *China Everbright Bank HK 3Y FRN L+70

12/?? $600M Twitter 8NCL (may price Dec 5)

Canadian issuance

12/04 C$1B *NAB 10.5NC5.5 +197

Eurodollar/Tsy options: 

Eurodollar Options

* +10,000 Sep 88/93 call spds, 5.5

* +10,000 Mar 85/87 1x2 call spds, 0.75

* >-6,000 Dec 81 straddles, 3.75-3.5

* >20,000 (pit/screen) Sep 88/93 call spds 5.5

* +30,000 short Feb 83/85 2x1 put spds, 0.5 vs. 98.59/0.08%

* +20,000 Red Dec 90 calls, 9.0

* +5,000 Blue Mar 80/90 put over risk reversals, 0.5

* 5,200 Jun 71/75 call spds on screen

* -25,000 (pit/screen) Jan 82/83 call spds, 5.0 vs 98.315/0.40%

* -3,000 Blue Jun 78/82 put spds, 8.0

* +10,000 Jun 90 calls, 2.5

* +5,000 Jun 80 puts, 1.0

* 1,100 Blue Jun 83 straddles, 42.0

* 1,500 Red Dec 85 straddles, 45.0

Recap overnight trade, Blocks

* Block +10,000 Mar 86/90 call spds, 1.25

* Block +5,000 Jun 82 calls, 20.5

* >20,800 Mar 87 calls, 1.0 last

* >10,500 Mar 90 calls, 0.5 last

* >11,200 short Dec 86 calls, 2.5 last

* >13,800 short Dec 87 calls, 1.25 last

Tsy options:

* 4,000 TYF 130 calls, 21/64 vs. 129-13.5

* 1,000 TYG 127 puts, 9/64

Block, 1123:28ET

* 10,000 USF 160/161/162 call trees, 1/64 net vs. 158-24/0.06 after 2k traded

On screen a few minutes later

* -10,000 USF 162.5 calls, 13/64

* 5,000 TYF 131 calls, 5/64 vs. 129-19.5

* Update, >3,500 TYG 128/TYH 127 put spds, 2/64 vs. 129-23

* Update, +8,000 FVH 114.25 puts, 1/64

* 2,500 TYG 128/TYH 127 put spds, 2/64 vs. 129-23

* Update, >10,000 TYF 127.75/129.25 put spds, 18-19

Recap overnight trade, Blocks

* 8,000 TYF 130/131.5 call spds,

* 3,000 TYF 130/131 1x2 call spds, 9/64

* 5,500 TYF 128.25 puts, 5/64

* 5,300 TYF 128 puts, 12/64

* 8,800 TYG 127.5 puts, 9/64

* 2,000 TYF 130.5/TYG 132 call spds on 1x2 basis, 6/64 net

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

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