US TSYS: FOMC NO RATE CHANGE, INFLATION NEAR SYMMETRIC TARGET

US TSY SUMMARY: Tsys trade mildly higher by the bell, long end underperforming

intermediates after initial post-FOMC rally, curves marching steeper. US$ index

chop post FOMC, pared gains but rebounding (DXY +.013 to 92.461 late).

- Fed held rate steady, initial react less hawkish than expected (drop

"strengthening economic outlook" while eco risks appear "roughly balanced").

Inflation upgrade: "expected to run near...symmetric 2 percent objective over

the medium term," vs. "expected to move up in coming months" prior. Long end

Tsys pared gains late, flow included real$ selling 30s, props selling 10s, curve

steepener buying from fast- and real$ 2s and 5s vs. 30s.

- Tsy qtr refunding +$1B increases across curve: $31B 3Y, $25B 10Y, $17B 30Y.

Equities weaker (emini -5.5, 2646.5; Gold firmer (XAU +5.0, 1308.90); West Texas

crude higher (WTI +0.75, 67.99). 

- Heavy block buys FVM early (+34.6k 113-11.5 avg) likely vs. -6,831 OEM (Jun

Bobl) at 130.92 -- adds to last wk super-sized blocks betting on Tsy ylds to

decline relative to Germany.

- Tsy ylds: 2Y 2.492%, 3Y 2.635%, 5Y 2.799%, 7Y 2.917%, 10Y 2.964%, 30Y 3.139%

US TSY FUTURES CLOSE: Treasury futures trade mildly higher by the bell, long end

underperforming intermediates after initial; post-FOMC rally. Curve update:

* 2s10s +1.392, 47.203 (48.204H/45.224L);

* 2s30s +2.153, 64.394 (64.714H/61.365L);

* 5s30s +2.419, 33.876 (33.876H/30.756L);

Current futures levels:

* Jun Ultra bonds down 01/32 at 155-31 (155-13L/156-18H)

* Jun 30-yr Bond futures Even 00/32 at 143-05 (142-22L/143-18H)

* Jun 10-yr futures up 04.5/32 at 119-16.5 (119-08L/119-18H)

* Jun 5-yr futures up 03.25/32 at 113-14.5 (113-9.75L/113-14.75H)

* Jun 2-yr futures up 01.25/32 at 106-0.50 (105-30.75L/106-0.50H)

US EURODOLLAR FUTURES CLOSE: Steady/mixed after the bell, short end

underperforming all session, narrow range out the curve. Current White pack

(Jun'18-Mar'19):

* Jun'18 -0.005 at 97.630

* Sep'18 -0.005 at 97.500

* Dec'18 +0.000 at 97.345

* Jun'19 +0.005 at 97.235

* Red pack (Jun'19-Mar'20) +0.005-0.010

* Green pack (Jun'20-Mar'21) +0.010-0.015

* Blue pack (Jun'21-Mar'21) +0.010-0.015

* Gold pack (Jun'22-Mar'22) +0.010

US DOLLAR LIBOR: Latest settles,

* O/N +0.0000 to 1.7044% (+0.0000/wk)

* 1 Month +0.0084 to 1.9171% (+0.0101/wk)

* 3 Month +0.0092 to 2.3629% (+0.0049/wk)

* 6 Month -0.0015 to 2.5127 (-0.0068/wk)

* 1 Year +0.0109 to 2.7768% (-0.0035/wk)

REPO REFERENCE RATES: (rate, volume)

* Secured Overnight Financing Rate (SOFR): down to 1.76% from 1.77% prior, $761B

* Broad General Collateral Rate (BGCR): down to 1.70% from 1.72 prior, $352B

* Tri-Party General Collateral Rate (TGCR): down to 1.70% from 1.71% prior,

$334B

US SWAPS: Spds mostly wider, short end leads move late; partially tied to lack

of swappable supply heading into the FOMC policy annc. Moderate session flow

included moderate switch activity in 2s and 3s w/better paying on net over the

last 90 minutes. Other flow includes receiver in 5s at 2.93031$, payer in 6s at

2.995%, receiver in 8s at 2.97125%, payers in 9s from 2.984-2.9985% and payer in

10s at 3.00125%. Latest spd levels:

* 2Y  +1.50/26.62

* 5Y  +1.06/12.25

* 10Y +0.56/3.44

* 30Y +0.00/-11.12

PIPELINE: Limited midweek issuance

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

* $300M EBRD 4Y FRN 3ML +1a

Potential issuance this week:

* $Benchmark, United Technologies

* $Benchmark, Coca-Cola (KO)

* $Benchmark Qualcomm, history of large annual issuance

-

$4.9B Priced Tuesday, mostly Lloyds 3Y fix/FRN, 7Y fix

05/01 $3.75B *Lloyds, $1.25B 3Y fix +70, $1B 3Y FRN L+49, $1.5B 7Y fix +153

05/01 $550M *Consumer Energy Co 30Y +97

05/01 $600M *American Builders & Contractors 8NC3 Sr notes, downsized from $800M

OUTLOOK: - May 03 Apr challenger layoff plans (39.4%, --) 0730ET

- May 03 28-Apr jobless claims (209k, 225k) 0830ET

- May 03 Q1 non-farm productivity (p) (0.0%, 0.9%) 0830ET

- May 03 Q1 unit labor costs (p) (2.5%, 3.0%) 0830ET

- May 03 Mar trade balance (-$57.6b, -$49.8b) 0830ET

- May 03 Apr Markit Services Index (final) (54.4, --) 0945ET

- May 03 29-Apr Bloomberg comfort index (57.5, --) 0945ET

- May 03 Apr ISM Non-manufacturing Index (58.8, 58.2) 1000ET

- May 03 Mar factory new orders (1.2%, 1.4%) 1000ET

- May 03 Mar factory orders ex transport (0.1%, --) 1000ET

- May 03 27-Apr natural gas stocks w/w (-18Bcf, --) 1030ET

- May 03 02-May Fed weekly securities holdings 1630ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

Late BLOCK,

* Total -45,000 Short Jun 71 puts at 5.5, adds to 35k in pit

UPDATE: Total 12,000 Blue Jun 72/75 call sprd at 1 vs 9694.5/0.05%

* 5,000 Mar 68/70/71 put trees, 2.5 vs. 97.21/0.10%

* +5,000 Mar 67 puts, 1.0

* +5,000 short May 72 calls, 0.5 vs. 97.135/0.09%

* Update, total +10,000 Short Jun 72 call at 2.5 vs 9711.5/0.20% vs.

* -10,000 Blue Jun 71 call at 3 vs 9693/0.20%, 0.5 net cr

* -5,000 Oct 72/75 Strangle at 7.5

* -5,000 Oct 72/75 strangles vs short Sep 67/70 put spds, even net

* +3,250 May 76 put/Jul 72 put strip at 2.0

* +10,000 Short Jun 72 call at 2.5 vs 9711.5/0.20% vs.

* -10,000 Blue Jun 71 call at 3 vs 9693/0.20%, 0.5 net cr

UPDATE: Total 10,000 Short Sep 67/70 put sprd at 7.5

UPDATE: Total -20,000 Short Jun 70/71 2x1 put sprd at 2.5

* +7,000 Short Dec 82 call at 0.5

* +5,000 Short Aug 75/76 call sprd at 0.5 w/

* +5,000 Short Sep 75/76 call sprd at 1.0 vs 9707/0.10%, 1.5 total db

* 5,000 Short May 72 call at 0.5 vs 9713.5/0.09%

* 3,500 Green Jul 68 Straddle at 22

* 10,000 Short Jun 70/71 2x1 put sprd at 2.5

* +2,500 Blue Mar 62/67 put over ris reversals, 0.0

* -4,000 Green Jul 70 Straddle at 22.5

UPDATE: Total -30,000 Short Jun 70/71/72/73 Put Condor at 6.5 vs 9712/0.18%

UPDATE: Total 6,000 Short Sep 67/70 put sprd at 7.5

UPDATE: Total 12,000 Short Jun 70/71 put sprd at 5 vs 9710-10.5/0.10%

* 5,000 Short Sep 67/70 put sprd at 7.5

* 9,000 Short June 68 put/Short Aug 67 put at 1.5 vs 9703/0.15%

* 11,000 Short Jun 70/71 put sprd at 5 vs 9710-10.5/0.10%

* 2,100 Short Dec 70 put/Gold Dec 62 put at 13.5

* 4,000 Green Jun 67/70 2x1 put sprd at 7

UPDATE: Total 23,000 Green Jun 67 puts, 2.5 vs. 96.935/0.10%, (adding to 20k

from screen)

UPDATE: Total 40,000 Mar 80 call at 1 vs 9722/0.05%, (adding to 20K from screen)

Latest Blocks, more Mar 80 calls

* total 15,000 Mar 80 calls, 1.0 at 0756:12-0802:11ET

Latest Blocks, more Green Jun 67 puts

* total 20,000 Green Jun 67 puts, 2.5 vs. 96.935/0.10% from 0745:32-0758:08

* 5,000 Mar 80 calls, 1.0 at 0756:12ET

Latest Block, 0745:32ET

* 5,000 Green Jun 67 puts, 2.5 vs. 96.935/0.10%

Tsy options, Pit/Screen:

* total 11,100 FVM 114/FVU 113.25 put spds, 1.5 to 2/64, adds to +20k Tue at

1/64

* 1,000 TYM 118.25/118.75 2x1 put spds, 1/64 vs. 119-09.4

* 1,000 TYM 118.118.5 put spds, 4/64

* 1,300 TYM 118.5 puts, 8/64 vs. 119-14/0.20%

* 20,000 Short Jun 70/71/72/73 Put Condor at 6.5 vs 9712/0.18%

* 8,000 May 76 put/Jul 72 put at 2

UPDATE: Total 68,000 Mar 80 call at 1 vs 9722/0.05%, (adding to 20K from screen)

Large duration weighted conditional curve trade on screen

* -14,285 TYN 117/118 put spds vs.

* +4,270 USN 138/140 put spds

* 3,500 FVM 114/FVU 113.25 put spds, 2.5/64

* 1,000 TUU 104.8/105.2/105.6 put flys, 4.5/64

Chunky early screen flow:

* total +38,500 TUN 106.25/106.37 call spds, 0.5

* +35,000 TYM 118.5 puts from 12- to 11/64

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

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