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CORN TECHS

(H2) Challenging Support

US TSY OPTIONS

Large 5Y Call Buy

US TSYS

Repo Reference Rates

EUR

EURUSD is through session low

SOY TECHS

(H2) Corrective Cycle

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     US TSYS SUMMARY: US Tsys ended higher Wednesday, portions of curve steeper
(5s30s +1.817, 62.089) or off early flats after FOMC voted 7-2 to tighten US Fed
Funds rate 25bp to 1.25%-1.50%; expects labor markets "will remain strong':
cited "solid" jobs gain. 
- Tsys gained after FOMC amid 2way flow: initial buys/short-cvr then mild
profit-taking, then more buying. Tsys began NY lower, rebounded on tame 0.1%
Core CPI, basically ignoring Nov CPI +0.4%. US$ weak, aiding Tsys earlier. 
- Curves flatten in morning, early afternoon, post-FOMC steepeners; 2way out
curve early afternoon. FX-tied buys in morning as US$/yen lower, fast-, real$
buyers in Tsy 10s and 30s, banks buying 30s. Other sellers of cash 5s and 10s 
- US Tsy futures: 1448-1449ET +10k FVH 116-14.25-15.25; large 1430ET Tsy futures
steepener block buy 11,600 FVH 5Y Futures buy-thru at 116-13.25/sell-thru of
2,000 WNH at 167-15. Early heavy front end Eurodollar futures selling (EDZ7,
EDH8). Late block buy: 2:58pm ET of 12,000 TUH 2Y Tsy futures at 107-06.5. AP:
Hse, Sen agreed in principle on tax pact, flr vote next wk. 
- 3PM ET: 2Y 1.786%, 3Y 1.899%, 5Y 2.112%, 7Y 2.257%, 10Y 2.351%, 30Y 2.737%.
FED: FOMC raised the funds rate to 1.25% to 1.50% on 7-2 vote. Evans and
Kashkari dissented, wanting no rate hike. 
- There was little change in the statement and the dots suggest three hikes in
2018 
- The median expectation for rates at the end of each year were unchanged for
2018 (2.1%) and 2019 (2.7%), but the outlook for 2019 was bumped up to 3.1% from
2.9%. It was unchanged at 2.8% for the long run. 
- The FOMC still expects "gradual increase" in the funds rate and risks remain
"roughly balanced" 
- The economic projections show bumped up expectations for GDP in 2018, with a
lower unemployment rate (3.9%) expected for 2018 and 2019, and for 2020 (4.0%).
Core PCE inflation expectations were unchanged.
US TSY FUTURES CLOSE: Broadly higher, long end off initial knee-jerk highs post
FOMC annc while front end surges in aftermath of Fed Yellen presser amid curve
flattener unwinds. Current futures levels: 
* Mar Ultra bonds up 1-08/32 at 167-22 (165-31L/167-31H) 
* Mar 30-yr Bond futures up 30/32 at 153-19 (152-09L/153-25H) 
* Mar 10-yr futures up 13.5/32 at 124-17.5 (123-29L/124-20H) 
* Mar 5-yr futures up 9.25/32 at 116-17 (116-03.25L/116-18.25H) 
* Mar 2-yr futures up 3.25/32 at 107-06.75 (107-02L/107-07H)
US EURODLR FUTURES CLOSE: Mostly higher by the bell, soon to expire front EDZ7
contract lower while balance of strip trades higher, Blues-Golds higher. Current
White pack (Dec'17-Sep'18): 
* Dec'17 -0.007 at 98.380 
* Mar'18 +0.025 at 98.245 
* Jun'18 +0.025 at 98.095 
* Sep'18 +0.035 at 98.015 
* Red pack (Dec'18-Sep'19) +0.040-0.050 
* Green pack (Dec'19-Sep'20) +0.050-0.055 
* Blue pack (Dec'20-Sep'21) +0.055-0.065 
* Gold pack (Dec'21-Sep'22) +0.065
US SWAPS: Spds running mixed after the close, spd curve flatter vs. post FOMC
steepening in Tsys. Spds had narrowed across the curve amid prop and bank
portfolio rate receiving in 2s-10s earlier; midmorning 5s7s8s and 5s7s10s spd
flys, 2-way spd curve flow in short end. Late curve unwinds, little deal-tied
hedging. OTC and exchange traded option vols crater post FOMC, eyes on packin
operations up heading into year end holidays now. Latest spread levels: 
* 2Y +0.88/20.62 
* 5Y +0.25/6.38 
* 10Y -0.38/+0.19 
* 30Y -0.62/-20.00
US OUTLOOK: Data/speaker calendar (prior, estimate):
- Dec 14 09-Dec jobless claims (236K, 239K) 0830ET
- Dec 14 Nov retail sales (0.2%, 0.3%) 0830ET
- Dec 14 Nov retail sales ex. motor vehicle (0.1%, 0.7%) 0830ET
- Dec 14 Nov retail sales ex. mtr veh, gas (0.3%, --) 0830ET
- Dec 14 Nov imports price index (0.2%, 0.8%) 0830ET
- Dec 14 Nov exports price index (0.0%, --) 0830ET
- Dec 14 Dec Markit Services Index (flash) (54.5, --) 0945ET
- Dec 14 Dec Markit Mfg Index (flash) (53.9, --) 0945ET
- Dec 14 10-Dec Bloomberg comfort index (52.3, --) 0945ET
- Dec 14 Oct business inventories (0.0%, -0.1%) 1000ET
- Dec 14 08-Dec natural gas stocks w/w 1030ET
- Dec 14 13-Dec Fed weekly securities holdings 1630ET
Eurodollar/Treasury Option Summary
Eurodollar options, Pit/screen:
* -15,000 Green Feb 73 puts, 0.5 vs. 97.735/0.10%
* 5,000 Green Dec 75/76/77 put flys, 3.5
* -4,000 Gold Dec 75 puts, 1.0 vs. 97.545
* More short Dec 78 put sellers 1.0 in pit, adding to -131k on screen (includes
blocks)
* -10,000 Jun 82 puts, 20.0
* +3,000 short Mar 78 straddles, 18.5
* -2,500 Jun 80/81 strangles, 10.5
* Update, total -7,500 Green Dec 77/78/80 put trees, 9.5 vs. 97.74/0.52% w/
* total -7,500 Blue Dec 76/77/78 put trees, 9.5 vs. 97.65/0.30%, 19.0 total cr
Block, 1104:30ET, adds to huge pit volume on trade -- remains well offered
* +10,000 Feb/Mar 81 put spds 0.5 (Feb over) adds to 110,000 in pit
* +5,000 Mar 82/83/85 call flys, 2.25 vs. 98.225/0.18%
* 3,000 short Jun 75/77 put flys, 7.5 vs.
* 3,000 Green Jun 73/76 2x1 put spds, 2.0
* short Dec 78 puts volume up to 128,660 at 1.0 (45k Blocked earlier)
* -10,000 Jun 80 puts, 20.0 earlier
* Update, over +20,000 Mar 82/83 1x2 call spds, 2.
Block, 0928:37ET
* 20,000 short Dec 78 puts, 1.0, adds to prior block and high screen volume,
total volume just over 104,000 at moment. Reminder, Dec futures & options expire
Friday.
Block, 0909ET
* +10,000 short Jun 72/75 put spds, 3.0
* 5,000 Mar 82 puts, 6.0
* 3,700 Mar 82/83/85 1x3x2 call flys, 1.5 net
* 2,000 Gold Dec 75 straddles, 6.5
* 10,000 short Dec 78 puts, 1.0, total volume 72,500 (25k Blocked earlier)
Block, 0833:35ET
* +25,000 short Dec 78 puts, 1.0, still offered
Block, 0831:09ET
* -22,000 Green Dec 77 puts, 4.0, hit bid post data, currently 3.5 offer
* 8,000 short Dec 78 straddles, 5.5
* 2,000 Green Dec 75/76 put spds, 1.0
* 2,000 Blue Dec 76 calls, 2.0 vs. 97.595
* 115,000 Dec 83 puts, 0.5 -- adds to 5k Block -- ongoing closer ahead Fri's Dec
options/futures expiration (OI -27,170 after 53,594 trade Tuesday).
* myriad smaller 1-, 2- and 3Y Dec midcurve trades as well
Block, 0645:10ET,
* 10,500 short Dec 77 puts, cab
Block, 0714:16ET,
* 5,000 Dec 83 puts, 0.5, ongoing closer ahead Fri's Dec options/futures
expiration (OI -27,170 after 53,594 trade Tuesday)
Tsy options, Pit/screen:
* 4,500 TUG 107/TUH 107.1 2x1 put spds, 2.5
* 1,000 TYG 128/129/130 1x3x2 call flys, 0.0 net
* +3,000 FVG 116/117 strangles, 19.5 -- minority buyer of vol on the session
* +5,000 wk5 TY 123/123.75 call spds, 9/64
* 2,000 USG 154 calls, 1-7/64 vs. 153-05/0.42% earlier
Block, 1041:30ET, combo repeats smaller trade in pit
* -10,500 TYH 122.5/126 put over risk reversals, 1/64 net -- no cover reported
on 0.37% delta package
Block, 0951:25ET
* 7,500 TYF 124.75 calls, 8/64 after earlier block of 7.5k TYF 124.25 call
* -1,750 FVG 116/116.75 strangles, 22.5/64
* -1,000 USG 152/155 strangles, 1-47/64
* +2,500 USG 154 calls, 1-8/64 vs. 153-05
* 7,000 TYF 123 puts, 1/64
* 1,000 TYF 121/122/123 2x3x1 put flys, 1/64 net/wings over
* +10,000 FVF 116.5 calls, 9/64
* 2,100 TYG 123/125.5 strangles, 21/64
* 4,750 TYF 124.5/125 1x2 call spds, 3/64
* 1,000 wk1 TY 124.7/125.7 1x2 call spds, 8/64
Block, 0835:29ET
* +7,500 TYF 124.75 calls, 10/64, bought offer at time of post, bid briefly but
offered again as underlying trims post data gains
Block, 0752:55ET, still well offered
* +7,500 TYF 124.25 calls, 14/64
--MNI New York Bureau; tel: +1 212-669-6432; email: sheila.mullan@marketnews.com
[TOPICS: MTABLE,MNUEQ$,M$U$$$,MR$$$$,M$$FI$,MN$FI$]
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