US TSYS: FOMC SEES ANOTHER RATE HIKE "WARRANTED FAIRLY SOON"

US TSY SUMMARY: Tsy trading mixed with the long end outperforming, strong volume

(TYZ 1.83M), curves flattening. Data today led by PCE, Personal Income, and

Spending and Initial Claims.

-Fed Minutes showed that most see another rate hike soon and further gradual

hikes are in line with dual mandate while few saw funds rate near neutral.

-Headlines out this afternoon, "*TRUMP SAYS HE IS CLOSE TO DOING SOMETHING WITH

CHINA-bbg" which led to a risk-on price action. Shortly after, "*U.S., CHINA

EXPLORING DEAL TO DE-ESCALATE TRADE TENSIONS: DJ-bbg" and "*U.S. WOULD SUSPEND

FURTHER CHINA TARIFFS THROUGH SPRING: WSJ-bbg". Sources say that Chinese

officials would agree to lift restrictions on Chinas purchases of US farm and

energy products in return for the suspension of tariffs. 

-DXY up +.017, 96.803 (96.626L/97.005H), $/Eur down +0.0021 at 1.1387, $/Yen

down -.25 113.42; equities higher (emini +5.50, 2747.00 vs. 2754.50H); Gold up

(XAU +2.87, 1224.09), WTI currently down (WTI +1.06, 51.35). 

-Tsy cash/ylds: 2Y 99-28.25 (2.811%), 5Y 100-3.5 (2.850%), 10Y 100-25.5

(3.030%), 30Y 100-28.5 (3.327%).

US TSY FUTURES CLOSE: Trading mixed with the short end out performing; strong

volume (TYZ 1.81M); curves flattening; update:

* 2s10s -2.940, 21.890 (21.346L/24.929H);

* 2s30s -1.935, 51.588 (50.129L/53.979H);

* 5s30s -0.383, 47.551 (46.473L/49.093H);

Current futures levels:

* Dec Ultra bonds up 01/32 at 151-06 (150-21L/152-07H)

* Dec 30-yr Bond futures up 06/32 at 140-04 (139-19L/140-24H)

* Dec 10-yr futures up 1.5/32 at 119-14 (119-7.5L/119-23.5H)

* Dec 5-yr futures down 0.25/32 at 112-30.25 (112-28.25L/113-5.25H)

* Dec 2-yr futures down 0.5/32 at 105-15.25 (105-15.25L/105-17.75H)

US EURODOLLAR FUTURES CLOSE: Trading mixed with the long end outperforming;

strong volume. Current White pack (Dec'18-Sep'19):

* Dec'18 -0.0175 at 97.2075

* Jun'19 -0.005 at 97.150

* Jun'19 0.000 at 97.085

* Sep'18 -0.005 at 96.025

* Red pack (Dec'19-Sep'20) -0.005

* Green pack (Dec'20-Sep'21) -0.005-EVEN

* Blue pack (Dec'21-Sep'21) +0.005-EVEN

* Gold pack (Dec'22-Sep'22) +0.015-0.010

US DOLLAR LIBOR: Latest settles,

* O/N +0.0003 to 2.1828% (+0.0058/wk)

* 1 Month +0.0047 to 2.3493% (+0.0274/wk)

* 3 Month +0.0315 to 2.7381% (+0.0469/wk)

* 6 Month -0.0014 to 2.8852% (-0.0010/wk)

* 1 Year -0.0154 to 3.1341% (-.0021/wk)

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

* Secured Overnight Financing Rate (SOFR): 2.19% vs. 2.20% prior, $850B

* Broad General Collateral Rate (BGCR): 2.19% vs. 2.18% prior, $429B

* Tri-Party General Collateral Rate (TGCR): 2.19% vs. 2.18% prior, $410B

PIPELINE: *** PRICED: $1b *Bank of New York Mellon

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

11/29  $1b *Bank of New York Mellon 2NC1 FRN 3mL +30

11/29  $500m Niagara Mohawk Power Corp 10Y +125a

11/29  $1b #BB&T 5Y +93

     OUTLOOK:

30-Nov 0900 *   Nov    ISM-Milwaukee Mfg Index                58.21    --

30-Nov 0945 **  Nov    MNI Chicago PMI                         58.4  58.5

30-Nov 1100 **  Q4     St. Louis Fed Real GDP Nowcast          2.66    --   %

30-Nov 1115 **  Q4     NY Fed GDP Nowcast                       2.5    --   %

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/Screen: 

* 5,000 Green Jan 66/67/68 put fly at 1.5 vs 9703/0.10%

* 10,000 Long Green Dec 62/75 Strangle at 33 BLOCK

* +5,000 Jun 71/72/73 1x3x2 call fly at 0.5

* +10,000 Short Dec 68 Straddle at 13.5 vs 97.5/0.56%

* -5,000 Short Apr 71/73/75 call fly at 4.25

* 5,000 Mar 73/75 call sprd at 0.5

* 5,000 Mar 68/70/71 put tree at 3.5 vs 9715.5/0.24%

* 5,500 Green Mar 65/68 put sprd at 6.5 vs 9704.5/0.26%

* 5,000 Mar 68/70 put sprd at 1

* 5,000 Dec 71/72 2x1 put sprd at 4.25

* -10,000 Short Dec 70 Straddle vs Green Dec 67 puts at 10.5

* -10,000 Short Mar 68 Straddle at 19 over 71 calls vs 99/0.10%

TSY OPTIONS:

* -5,000 Wk1 121.75/123 1x2 call sprd at 0

* +4,000 Wk1 118 puts at 1

* -1,600 TYG 120 calls at 29

* +1,500 TYF 119 puts at 17

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

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