US TSYS: INTERMEETING RATE CUT CAN'T SOLVE EVERYTHING

     US TSY SUMMARY: Late risk-off panic buying that drove 10YY and 30YY yields

to new all-time lows (10YY 0.9043%; 30YY 1.5041%) cooled off slightly as the

rout in equities lost momentum in late trade. Markets doing their best to price

in another rate cut at the Mar17-18 FOMC after the FOMC's first intermeeting

rate cut since October 2008. Yld curves surged steeper 3M10Y off inversion.

- When 50bps cut just isn't enough! Eurodollar futures market pricing in at

least another 25bps move by the FOMC at the Mar17-18 annc and more anticipated

as the year progresses. Lead quarterly lead gap bid on heavy volumes.

- Not waiting for more virus news (or Fri's jobs data for a hint) Soc Gen

economists just out w/expectation of another 25bp cut at the March meet. Not

that intermeeting cuts happen very often (today's was first since late

2008) one desk notes the Fed has never made an intermeeting cut WITHOUT

following up with another cut" at the next scheduled meeting. 

- The 2-Yr yield is down 20bps at 0.703%, 5-Yr is down 19.6bps at 0.7462%, 10-Yr

is down 16.1bps at 1.0022%, and 30-Yr is down 10.4bps at 1.617%.

TECHNICALS:

US 10YR FUTURE TECHS: (M0) Shock Cut Keeps Support Firm

*RES 4: 137-00 Round number resistance

*RES 3: 136-12+ 1.764 projection of Jan 9 - Feb 3 rally from Feb 6 low

*RES 2: 135-28 1.618 projection of Jan 9 - Feb 3 rally from Feb 6 low

*RES 1: 135-24+ High Mar 2

*PRICE: 135-21+ @ 16:32 GMT, Mar 3

*SUP 1: 133-14 Low Feb 28

*SUP 2: 132-04 20-day EMA

*SUP 3: 131-30 High Feb 3 and former breakout level

*SUP 4: 130-27 50-day EMA

Treasuries remain bullish. The contract achieved a fresh high print again

yesterday at 135-24+. Last week's rally resulted in a break of the Feb 3 high of

131-30, confirming a resumption of the current bull trend and bulls haven't

looked back. Moving average studies remain in a positive mode although it is

still worth noting that the trend remains overbought. Support is at 133-14, the

focus is on 135-28 next, a Fibonacci projection ahead of 136-00.

AUSSIE 3-YR TECHS: (M0) Momentum Lacking 

*RES 4: 100.000 - Handle Resistance

*RES 3: 99.805 - 123.6% Fib Projection of February rally

*RES 2: 99.721 - 4.0% Upper Bollinger Band

*RES 1: 99.665 - High Mar 1

*PRICE: 99.570 @ 16:33 GMT Mar 3

*SUP 1: 99.200 - Low Jan 16

*SUP 2: 99.180 - Low Jan 10, 14 and 14 and near-term key support

*SUP 3: 99.085 - Low Jan 3

*SUP 4: 99.055 - Low Dec 31 and primary support

With the roll now largely complete, Aussie 3yr futures hold close to recent

highs but even an RBA and Fed rate cut Tuesday left bulls wanting. The erratic

rally seems to be moderating for now leaving the most likely direction from here

to be sideways. This keeps upside targets pointed higher, but looking slightly

out of reach for now. A 99.355 print needed to moderate the bullish outlook.

AUSSIE 10-YR TECHS: (H0) Still Elevated

*RES 3: 99.4362 - 123.6% Fib projection of February Rally

*RES 2: 99.3305 - 3.0% Upper Bollinger Band

*RES 1: 99.3300 - High Feb 28 and Alltime High

*PRICE: 99.2400 @ 16:45 GMT, Mar 3

*SUP 1: 98.7150 - Low Jan 14 and key near-term support 

*SUP 2: 98.5900 - Low Jan 3 

*SUP 3: 98.5700 - Low Jan 2 and primary support

Aussie bonds were firm from the open, but swiftly moderated once more after the

RBA rate cut effect was short-lived. Upside targets remain at vol band

resistance of 99.3305 and Fib projection levels at 99.4362. To the downside, the

initial focus is on 98.7150, Jan 14 low where a break is required to signal a

fresh round of stronger bearish pressure.

JGB TECHS: (M0): Back Down to Earth

*RES 3: 154.87 - 1.0% 10-dma envelope

*RES 2: 154.61 - 76.4% Sep - Dec 2019 Decline

*RES 1: 154.38- High Mar 2

*PRICE: 153.93 @ 16:46 GMT, Mar 3

*SUP 1: 152.50 - 50-dma

*SUP 2: 151.62 - Contract lows, Dec 20

*SUP 3: 151.11 - 76.4% retracement of August 2018 - September 2019 Rally

The solid gap higher last week continues to exert influence over prices

resulting in a decent rally into the Friday close. This keeps the outlook

materially bullish despite Monday's pullback as the run began to look a little

over-extended. A close above 154.00 would build a decent base for a challenge on

the best levels of 2019. The 200-dma switches to support at 153.50.

TSY FUTURES CLOSE: Late risk-off panic buying that drove 10YY and 30YY yields to

new all-time lows (10YY 0.9043%; 30YY 1.5041%) cooled off slightly as the rout

in equities lost momentum in late trade. Markets doing their best to price in

another rate cut at the Mar17-18 FOMC after the FOMC's first intermeeting rate

cut since October 2008. Yld curves surged steeper 3M10Y off inversion. Update: 

* 3M10Y  +8.684, 4.8660 (L: -11.356 / H: 13.517)

* 2Y10Y  +3.790, 29.432 (L: 24.193 / H: 32.885)

* 2Y30Y  +9.627, 91.078 (L: 79.998 / H: 93.657)

* 5Y30Y  +9.334, 86.955 (L: 76.649 / H: 88.269); Current futures levels:

* Jun 2-Yr futures up 6/32  at 109-14.125 (L: 109-02.12 / H: 109-19)

* Jun 5-Yr futures up 18.5/32  at 123-18 (L: 122-16 / H: 124-00)

* Jun 10-Yr futures up 26.5/32  at 135-30 (L: 134-09 / H: 136-23)

* Jun 30-Yr futures up 1-6/32  at 172-9 (L: 169-00 / H: 174-16)

* Jun Ultra futures up 29/32  at 209-2 (L: 203-27 / H: 213-25)

US EURODLR FUTURES CLOSE: When 50bps cut just isn't enough! Market pricing in at

least another 25bps move by the FOMC at the Mar17-18 annc and more anticipated

as the year progresses. Lead quarterly lead gap bid on heavy volumes. Current

White pack (Mar'20-Dec'20):

* Mar 20 +0.217 at 98.987 vs. 99.0325 high!

* Jun 20 +0.170 at 99.240

* Sep 20 +0.165 at 99.330

* Dec 20 +0.165 at 99.315

* Red Pack (Mar 21-Dec 21) +0.105 to +0.130

* Green Pack (Mar 22-Dec 22) +0.10 to +0.110

* Blue Pack (Mar 23-Dec 23) +0.110 to +0.115

* Gold Pack (Mar 24-Dec 24) +0.10 to +0.110

US DOLLAR LIBOR: 

* O/N +0.0010 at 1.5756% (+0.0079/week)

* 1 Month +0.0210 to 1.3768% (-0.1385/wk)

* 3 Month +0.0605 to 1.3143% (-0.1485/wk)

* 6 Month +0.0537 to 1.2520% (-0.1452/wk)

* 1 Year +0.0918 to 1.2456% (-0.1358/wk)

US SWAPS: Choppy day for swap spds, short end gapped wider after surprise rate

cut and continues to expand to highest lvl since early January. Balance of spds

directionally tighter w/Tsy ylds. Several factors at play, tactical rate and spd

paying in short end on good size from prop, fast$ accts as they sell into the

move. Not sure how long it will last but influx of swappable corp issuance

absent last couple weeks helping spds narrow out the curve. Latest spd levels:

Time(ET)   2Y Swap/Mid    5Y Swap/Mid   10Y Swap/Mid   30Y Swap/Mid

Tue 1500   +2.00/+7.50    -0.50/+6.25   -0.62/-1.62    -1.88/-38.88

1315       +2.50/+8.00    -0.81/+5.94   -0.94/-1.94    -1.88/-38.88

1030       +1.00/+6.50    -1.12/+5.62   -1.00/-2.00    -1.25/-38.25

0900       -0.50/+5.00    -0.38/+6.31   -0.25/-1.25    -0.19/-37.31

Tue Open   +0.31/+5.81    -0.06/+6.69   +0.25/-0.75    -0.38/-37.50

Mon 1500   -0.25/+6.75    +2.06/+6.44   +1.94/-1.31    +0.12/-37.38

Monday recap: Intermediate spds lead charge wider, pulling wings off earlier

lows as markets looking to scale back at least some of the risk-aversion trade

over the past week. fast$ continued rate paying in 2s-10s. Note, intermediates

appr 8-9bp off last week Mon's inverted lows.

STIR: Federal Reserve Bank of New York EFFR for prior session:

* Daily Effective Fed Funds Rate: 1.59%, volume: $58B

* Daily Overnight Bank Funding Rate: 1.58%, volume: $149B

US TSYS: REPO REFERENCE RATES:

* Secured Overnight Financing Rate (SOFR): 1.59%, $1.291T

* Broad General Collateral Rate (BGCR): 1.57%, $472B

* Tri-Party General Collateral Rate (TGCR): 1.57%, $451B

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

04-Mar 0700 28-Feb MBA Mortgage Applications (1.5%, --)

04-Mar 0815 Feb ADP private payrolls (291k, 170k)

04-Mar 0945 Feb Markit Services Index (final) (49.4, 49.4)

04-Mar 1000 Feb ISM Non-manufacturing Index (55.5, 54.9)

04-Mar 1030 28-Feb crude oil stocks ex. SPR w/w

04-Mar 1400 Federal Reserve releases Beige Book.

04-Mar 1830 StL Fed Bullard opening remarks, Homer Jones memorial lecture, Q&A

PIPELINE: $5.4B priced Tuesday, McDonalds helped break near two week string of

no corp issuance

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

03/03 $2B *McDonalds Corp $500M 5Y +75, $750M each: 10Y +115, 30Y +160

03/03 $1B *Sherwin Williams $500M each 10Y +130, 30Y +170

03/03 $800M *American Electric Power WNG $400M each 10Y +130, 30Y +165

03/03 $500M *Canadian Pacific Railway 10Y +105

03/03 $350M *Entergy Louisiana 31Y +130

03/03 $750M *Texas Instruments 5Y +60

On tap:

03/04 $Benchmark World Bank (IBRD) 5Y +10a

03/?? $Benchmark Belarus 15Y (in addition to EUR 6- or 8Y)

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

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