US TSYS: FI SALE AHEAD WED FOMC, CURVE PRICING MORE HIKES

US TSY SUMMARY: Tsys ground lower early Tue, partially weighed by unexpectedly

high corp issuance hedging ($10B AB/INBEV 5-tranche) amid thin market conditions

(TYM<935k) w/accts sidelined ahead Wed FOMC, as well as bounce in US$.

- US$ index higher (DXY +.613, 90.378); equities near steady (emini 0.0 at

2722.75 while Facebook remains pressured on data sharing scandal); gold weaker

(XAU -6.55, 1310.30); West Texas crude higher (WTI +1.34, 63.40).

- Heavier Eurodollar put buying, covering mid-2019 sector as underlying

continues to adjust for higher rates.

- Late ylds: 2Y 2.334%, 3Y 2.481%, 5Y 2.686%, 7Y 2.817%, 10Y 2.885%, 30Y 3.118%

US TSY FUTURES: Lower across the curve, at/near session lows on light volume

(TYM<935k) with many sidelined ahead Wed's FOMC annc, focus more on SEP dot plot

than what is widely expected to be a .25bp hike. Curve update:

* 2s10s +0.032, 54.420 (55.802H/53.916L);

* 2s30s +0.279, 77.710 (79.120H/76.896L);

* 5s30s +0.204, 43.092 (44.119H/42.532L);

Current futures levels:

* Jun Ultra bonds down 1-4/32 at 156-10 (156-07L/157-10H)

* Jun 30-yr Bond futures down 27/32 at 143-22 (143-21L/144-14H)

* Jun 10-yr futures down 11.5/32 at 120-01 (120-01L/120-11H)

* Jun 5-yr futures down 6.5/32 at 113-26.5 (113-26L/113-31.75H)

* Jun 2-yr futures down 2.5/32 at 106-05 (106-05L/106-07.25H)

US EURODOLLAR FUTURES CLOSE: Lower across the strip, near late session lows on

heavier volume/sellers in short end as 3M LIBOR continues to notch higher.

Current White pack (Jun'18-Mar'19):

* Jun'18 -0.035 at 97.660

* Sep'18 -0.045 at 97.565

* Dec'18 -0.040 at 97.430

* Jun'19 -0.045 at 97.320

* Re0d pack (Jun'19-Mar'20) -0.040-0.050

* Green pack (Jun'20-Mar'21) -0.050-0.045

* Blue pack (Jun'21-Mar'21) -0.050-0.045

* Gold pack (Jun'22-Mar'22) -0.050

US DOLLAR LIBOR: Latest settles, 

* O/N +0.0000 to 1.4475 (+0.0013/wk)

* 1 Month +0.0131 to 1.8538% (+0.0317/wk)

* 3 Month +0.0256 to 2.2481% (+0.0464/wk)

* 6 Month +0.0194 to 2.4099% (+0.0463/wk)

* 1 Year +0.0182 to 2.6514% (+0.0369/wk)

PIPELINE: Still waiting for AB/INBEV to price

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

03/20 $10B #Annheuser-Busch INBEV, details:

  $1.5B 5Y fix +90, $500M 5Y FRN L+74, 

  $2.5B 10Y +125, $1.5B 20Y +135, 

  $2.5B 30Y +150 and $1.5B 40Y +165

03/20 $750M upsized #Entergy Louisiana LLC 15Y IPT +115

03/20 $700M *Virginia Electric & Power Co 10Y IPT +95

03/20 $500M *MetLife PerpNC10 Pref IPT 5.875%

03/20 $1B *Kommunalbanken (KBN) 2Y; IPT MS -1

03/20 $400M Ohio Power Co 30Y IPT +115a

03/20 $500M Nordic Investment Bank Min. 2Y IPT MS -6a

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

- Mar 21 FOMC policy meeting day 2 

- Mar 21 16-Mar MBA Mortgage Applications (0.9%, --) 0700ET 

- Mar 21 Q4 current account balance (-$100.6B, -$125.0B) 0830ET 

- Mar 21 Feb existing home sales (5.38M , 5.4M) 1000ET 

- Mar 21 16-Mar crude oil stocks ex. SPR w/w (5.02M bbl, --) 1030ET 

- Mar 21 FOMC policy announcement, 1400ET 

- Mar 21 Fed Chair Powell press conf, 1430

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* +10,000 Blue Dec 66/73 put spds, 37.5

* -5,000 Dec 73 puts, 11.0

* -10,000 short Sep 68/71 put spds, 9.5

* -8,000 short Jun 72 straddles, 24.0

* -5,000 Green Jun 68/70/72 

* +5,000 Blue Apr 72/73 call spds, 1.0

* +10,000 short Jun 68/70/71 put flys, 1.75 on legs

* 12,200 Green Jun 67/70 put spds, 8.5

* 18,300 Green Sep 62/67/70 1x3x2 put flys, 10.5

* 7,500 Mar'19 68/70 3x2 put spds, 1.5

* +8,000 short Dec 67/70 put spds 4.75 over the Dec 70/72 put spds

* +4,000 Dec/short Dec 71 put spd, 22.0, EOZ over

Block, 0920:17ET (bought on spd vs. 75 put earlier)

* 10,000 Jun 76 puts, 5.5 vs. 97.67/0.25%, mid-market

* +50,000 short Jun 70 puts, 4.0 (+20k Blocked at 0901ET)

* +5,000 Jun 73 puts, 0.5

* +5,000 short Dec 85 calls, 1.0

Screen and Block posts coming into session:

* +43,650 Apr 77/78 1x2 call spds, 1.25 to .75

* +20,000 May 78/80 1x2 call spds, cab

* -9,000 Blue Jun 68/70/72 put trees, 6.0

* total 10,500 Jun 75/76 put spds blocked overnight at 3.0 vs. 97.695/0.20

Tsy options, Pit/screen:

* 10,000 TYK 118/119.5 put spds, 17/64 vs. 120-03/0.25%

* 1,000 TYJ 119/119.25 put strip, 6/64

* total +20,000 FVK 116 calls, 1.5/64

* +20,000 FVK 116 calls, 1.5/64 looking for more

* -5,000 TUM 106.7/107.25 call spds, 1.5/64

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

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