US TSYS: FOMC STICK W/3 DOTS, INFLATION NOT ACCELERATING

US TSY SUMMARY: Post-FOMC chop saw futures alternately make new highs then

session lows as market digested dots, hold at 3 (rally), but more aggressive

2019 path (sell-off). Dovish comments on Fed chair presser spurred steepener/bid

in short end.

- US$ index lower/reverses Tue's gains post FOMC (DXY -.604, 89.770); equities

mildly higher (emini +1.5, 2725.0); gold gaps higher (XAU +23.60, 1334.90); West

Texas crude stronger as well (WTI +1.93, 65.47).

- Short end Eurodollar futures reversed losses/pulled higher after dovish tone

from Fed chair Powell that there is no sense we are "on the cusp of an

acceleration in inflation" from current data. Focus is on more aggressive 2019

hikes. Buyer of appr 165,000 EDZ9/EDZ0 spds from 0.065-0.080 last two sessions

making out well, spd currently 0.120. - Swap spds wider, spd curve flatter with

short end leading move, better rate paying in short end late. Light deal-tied

flow, early two-way across curve amid better selling from fast$, props

- Late ylds: 2Y 2.303%, 3Y 2.462%, 5Y 2.681%, 7Y 2.815%, 10Y 2.889%, 30Y 3.121%

US TSY FUTURES: Mixed after the bell, curve steeper with long end

underperforming. Note, post FOMC chop saw futures alternately make new highs

then session lows as market digested dots, hold at 3 (rally), but more

aggressive 2019 path (sell-off). Dovish comments on Fed chair presser spurred

steepener/bid in short end. Curve update:

* 2s10s +3.354, 58.048 (59.796H/53.809L);

* 2s30s +3.515, 81.628 (82.733H/76.368L);

* 5s30s +0.949, 44.169 (44.433H/40.814L);

Current futures levels:

* Jun Ultra bonds down 13/32 at 156-50 (155-11L/157-01H)

* Jun 30-yr Bond futures down 7/32 at 143-20 (142-30L/144-05H)

* Jun 10-yr futures down 1.5/32 at 120-01.5 (119-22L/120-08H)

* Jun 5-yr futures up .25/32 at 113-27.5 (113-19L/113-29.5H)

* Jun 2-yr futures up1.25/32 at 106-06.75 (106-03.5L/106-07.5H)

US EURODOLLAR FUTURES CLOSE: Mixed after the bell, well off late session lows,

front end higher-near late highs amid mildly dovish comments from Fed chair

Powell such as no sense we are "on the cusp of an acceleration in inflation"

from current data. Current White pack (Jun'18-Mar'19):

* Jun'18 +0.010 at 97.670

* Sep'18 +0.020 at 97.585

* Dec'18 +0.020 at 97.450

* Jun'19 +0.010 at 97.335

* Re0d pack (Jun'19-Mar'20) +0.005 to -0.020

* Green pack (Jun'20-Mar'21) -0.035-0.040

* Blue pack (Jun'21-Mar'21) -0.040-0.045

* Gold pack (Jun'22-Mar'22) -0.040-0.035

US DOLLAR LIBOR: Latest settles, 

* O/N +0.0012 to 1.4487 (+0.0025/wk)

* 1 Month +0.0074 to 1.8612% (+0.0391/wk)

* 3 Month +0.0230 to 2.2711% (+0.0694/wk)

* 6 Month +0.0243 to 2.4342% (+0.0706/wk)

* 1 Year +0.0250 to 2.6764% (+0.0619/wk)

PIPELINE: After Tue's $13.85B, Wed see small corp issuance ahead FOMC

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

03/21 $500M *Nordic Investment Bank Min. 2Y IPT MS -6a

-

$13.85B Priced Tuesday, AB/INBEV lead

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 *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

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

- Mar 22 17-Mar jobless claims (226k, 226k) 0830ET 

- Mar 22 Jan FHFA Home Price Index (0.3%, --) 0900ET 

- Mar 22 Mar Markit Services Index (flash) (55.9, --) 0945ET 

- Mar 22 Mar Markit Mfg Index (flash) (55.3, --) 0945ET 

- Mar 22 18-Mar Bloomberg comfort index 0945ET 

- Mar 22 Feb leading indicators (1.0%, 0.6%) 1000ET 

- Mar 22 16-Mar natural gas stocks w/w (-93Bcf, --) 1030ET 

- Mar 22 Mar Kansas City Fed Mfg Index (17, --) 1100ET 

- Mar 22 $11 Bln 10-Year TIPS Reopening 1300ET 

- Mar 22 Mar Treasury Allotments (p) 1500ET 

- Mar 22 21-Mar Fed weekly securities holdings 1630ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* +10,000 Apr 75/76 put spds, 2.25 over Apr 77 calls

* +7,500 Red Dec 71 puts, 21.5 over Green Mar 65 puts

* +4,000 Blue Jun 71/76 1x3 call spds, 6.0

* -3,000 Blue Jun 68/71 strangles, 19.5

* -5,000 Jun 77/78 1x2 call spds, 0.5

* +5,000 short Apr 71 puts, 4.0

* +5,000 short Jun 67/70 2x1 put spds, 3.0

* +25,000 Jul/Sep 71/72/73 put fly strip, 2.5

* 2,500 Jul 70/71/72/73 put condors, 1.5 vs. 97.545/0.10

* +7,500 Dec 71/72 put spds 0.0 vs. Dec 77 calls

* +10,000 May 75/76 put spds 1.75 over the Mar 77 calls

* total 15,000 short Jun 70/71 put spds 1.5 over short Jun 75 calls

* +7,000 short Apr/Green Apr 76 call spds, 1.0

Latest Block, 1148:22ET

* +10,000 short Sep 63/76 call over risk reversals, 1.0 vs. 97.005/0.50%

* 10,000 short Jun 70/71 put spds 1.5 over the short Jun 75 calls vs.

97.17/0.10%

* 4,000 short Jun 67/70 2x1 put spds, 3.0

* +4,000 short Dec 72/77 call spds vs. Blue Dec 71/75 call spds, 0.0 net

* 10,000 May 75/76 put spds, 1.75 over the MAy 77 calls

* 5,000 May 76/77/78 call trees, 3.5

* +5,000 Mar 67/70 3x2 put spds, 6.5 vs. 97.295

* +3,000 Red Jun'19 76/78 call spds, 4.0

* +3,500 Green Apr 70 straddles, 17.5

* Update, total 26,000 short Jun 70/71 2x1 put spds, 0.5

* Update, total +20,000 short Jun 70 puts, 5.0

Block, 0901:14ET

* 10,000 short Jun 72/73 1x2 call spds, 1.5 net/2-legs over

* -1,000 Dec 76 straddles, 12.5

* -10,000 Jun 75 puts, 2.5

* over 48,000 Apr 75 puts, 1.0 on screen

Other screen highlights:

* 8,500 Green May 66/68 put spds

* 10,000 Green Jun 67/68 put spds

* 3,000 short Jun 67/70/72 put flys

Tsy options, Pit/screen:

* 2,000 FVK 115.25 calls, 2.5/64 vs. 113-25.25/0.10%

* 3,000 TYK 119.5 straddles, 1-11/64 vs. 119-29.5 to -30

* Update, over 5,000 FVJ 113.75 straddles sold from 24.5- 23/64

* +3,000 TUM 106.7 calls, 2/64

* 1,100 FVJ 113.75/114 1x2 call spds, 2/64

* +1,000 FVM 113.7 straddles at 1-0/64 vs.

* -2,000 TYJ 120.25 straddles, 38/64

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

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