US TSYS: Mkt Stoicism Or Exhaustion? GDP Est's Lowered

US TSY SUMMARY: Tsys see-sawed higher Thu, long end well off second half highs

amid thin participation, light volume (WNM dropped a full handle seconds after

extending session high). Yld curves mostly steeper, 3M10Y little flatter after

tapping two-year highs Wed. 

- In early trade, long end gapped lower/pared gains after headlines WH mulling

bonds out to 50Y (again). Poor data (Claims +70k to 281k, Philly Fed -12.7)

helped spur rebound. Dealers reducing GDP est's.

- Not quite risk-on, but mkts a little more stoic on day w/equities firmer late,

near top end of range (SPs +25.0) with Trump admin considering "TAKING EQUITY

STAKES IN COMPANIES IT AIDS". West Texas crude surged near 25% (around 25.5

late) on headline Trump admin would like to facilitate Saudi/Russia discussions

on oil.

- Unexpected jump in corp issuance ($18.5B, $45.4B/wk) spurred decent two-way

hedging flow on day. Heavy option volume, put buying. 

- The 2-Yr yield is up 4.1bps at 0.5337%, 5-Yr is up 4.5bps at 0.7879%, 10-Yr is

up 11.3bps at 1.1915%, and 30-Yr is up 10.3bps at 1.7875%

RECAP NY Fed operational purchases for today, operation size should repeat

Friday: appr $75B again:

* Tsy 7-20Y, $6.001B accepted, $11.479B submitted

* Tsy 4.5-7Y, $11.001B accepted, $19.384B submitted

* Tsy 2.25-4.5Y, $16.999B accepted, $18.933B submitted

* Tsy 0-2.25Y, $24.999B accepted, $31.900B submitted

* Tsy 20-30Y, $8.999B accepted, $9.530B submitted

* TIPS 7-7.5Y, $6.999B accepted, $11.150B submitted

TECHNICALS:

US 10YR FUTURE TECHS: (M0) Volatile And Vulnerable 

*RES 4: 139-07   High Mar 12

*RES 3: 138-30+ High Mar 16

*RES 2: 138-04   High Mar 17 

*RES 1: 136-00+ High Mar 18 

*PRICE: 135-04+ @ 16:08 GMT, Mar 19

*SUP 1: 133-21   Intraday low  

*SUP 2: 133-14   Low Feb 28

*SUP 3: 133-02+ 50-day EMA

*SUP 4: 132-18+ Low Feb 26

10yr futures remain volatile and traded a touch higher Thursday. The contract

has breached a support area highlighted by the 20-day EMA, paving the way for a

deeper retracement  in what is being viewed as a much needed correction. The

focus is on 133-14, Feb 28 low and potentially a test of the 50-day EMA

currently at 133-03+. The latter is seen as a key support area. On the upside,

initial resistance is at the Wednesday high of 136.00+.

AUSSIE 3-YR TECHS: (M0) RBA Light a Fire 

*RES 4: 99.778 - 1.382 projection of Dec 31 - Feb 3 rally from Feb 6 low (cont)

*RES 3: 99.719 - 1.236 projection of Dec 31 - Feb 3 rally from Feb 6 low (cont)

*RES 2: 99.750 - High Mar 09 and bull trigger

*RES 1: 99.720 - High Mar 19

*PRICE: 99.710 @ 15:32 GMT Mar 19

*SUP 1: 99.440 - Low Mar 16

*SUP 2: 99.300 - Recent low (cont)

*SUP 3: 99.225 - Low Feb 6 and 13 (cont)

*SUP 4: 99.180 - Low Jan 10, 14 and 15 (cont)

The RBA's venture into bond markets at the Thursday meeting underpinned a sharp

rally in Aussie bonds across the curve - muddying the technical outlook

considerably. Nonetheless, key resistance still sits ahead at the 99.75 mark,

the Mar 9 high. Intraday, futures need to be able to trade above resistance at

99.680, Mar 13 high to cement a bullish outlook. A break of the Mar 16 low would

trigger deeper short-term losses and open the 99.300 level, a recent low of the

continuation chart.

AUSSIE 10-YR TECHS: (M0) Net Nothing

*RES 3: 99.5598 - 1.236 projection of the Jan 2 -Feb 4 rally from Feb 13 low 

*RES 2: 99.4850 - High Mar 10 and bull trigger 

*RES 1: 99.2600 - High Mar 12

*PRICE: 98.7350 @ 15:47 GMT, Mar 19

*SUP 1: 98.6300 - Low Mar 18

*SUP 2: 98.5700 - Low Jan 2

*SUP 3: 98.1305 - 1.0% 10-dma envelope

Intraday volatility surged Thursday on the RBA announcement, prompting a sharp

move lower to 97.4850. Nonetheless, the recovery was swift and has net no impact

on the technical outlook. The retains the short-term downtrend as the correction

that has unfolded off the Mar 10 high of 99.4850 appears likely to extend. This

opens early 2020 lows at 98.5700. On the upside, a break of resistance at

99.3600, Mar 12 high is needed to ease the current bearish risk and open the

99.4850 bull trigger, Mar 10 high.

JGB TECHS: (M0): Retreat Mode Cemented

*RES 3: 156.02 - High Mar 10 and key resistance 

*RES 2: 154.56 - High Mar 13

*RES 1: 153.50 - High Mar 16

*PRICE: 151.05 @ 15:55 GMT, Mar 19

*SUP 1: 150.61 - Low Mar 19

*SUP 2: 150.06 - 2.0% 10-dma envelope

*SUP 3: 150.00 - Psychological round number 

JGB futures remain vulnerable following the recent sharp sell-off that began off

the Mar 10 high of 156.02. Downside pressure cemented with the break of the

recent 151.52 low, which opens 150.61 next as well as the psychological 150.00

handle further out. On the upside, initial resistance is seen at 153.50, Mar 16

high.

TSY FUTURES CLOSE: Well bid but off second half highs by the bell, choppy

session on thin participation in the long end (WNM dropped a full handle seconds

after extending session high). Yld curves mostly steeper, 3M10Y little flatter

after tapping two-year highs Wednesday. Latest levels

* 3M10Y  -7.294, 108.552 (L: 94.166 / H: 119.391)

* 2Y10Y  +4.331, 69.512 (L: 58.749 / H: 76.306)

* 2Y30Y  +10.955, 135.667 (L: 118.476 / H: 141.245)

* 5Y30Y  +13.624, 113.198 (L: 97.293 / H: 118.162); Current futures levels:

* Jun 2-Yr futures up 6.125/32 at 110-0.375 (L: 109-27.5 / H: 110-04.75)

* Jun 5-Yr futures up 22/32 at 123-31.75 (L: 123-08 / H: 124-14.5)

* Jun 10-Yr futures up 31/32 at 135-1.5 (L: 133-21 / H: 135-31)

* Jun 30-Yr futures up 4-0/32 at 171-31 (L: 167-27 / H: 175-31)

* Jun Ultra futures up 5-05/32 at 202-12 (L: 197-14 / H: 210-00)

RECAP NY Fed operational purchases for today 

* Tsy 7-20Y, $3.001B accepted, $9.539B submitted

* Tsy 4.5-7Y, $8.001B accepted, $21.583B submitted

* Tsy 2.25-4.5Y, $4.001B accepted, $14.488B submitted

* Tsy 0-2.25Y, $15.001B accepted, $31.488B submitted

* TIPS 1-7.5Y, $5.001B accepted, $10.470B submitted

* Tsy Bills 0-1Y, $5.001B accepted, $18.284B submitted

US EURODLR FUTURES CLOSE: Broadly higher for the most part after the bell, off

top end broad session range while Whites remained under pressure all session,

lead quarterly underperforming. Current White pack (Jun'20-Mar'21): 

* Jun 20 -0.110 at 99.355

* Sep 20 -0.035 at 99.525

* Dec 20 -0.015 at 99.50

* Mar 21 -0.015 at 99.525

* Red Pack (Jun 21-Mar 22) +0.015 to +0.090

* Green Pack (Jun 22-Mar 23) +0.105 to +0.140

* Blue Pack (Jun 23-Mar 24) +0.150 to +0.175

* Gold Pack (Jun 24-Mar 25) +0.185 to +0.210

US DOLLAR LIBOR: Latest settles

* O/N -0.0816 at 0.2982% (-0.7866/week)

* 1 Month +0.1507 to 0.9236% (+0.1235/wk)

* 3 Month +0.0794 to 1.1951% (+0.3519/wk)

* 6 Month +0.0275 to 0.9795% (+0.1582/wk)

* 1 Year +0.0326 to 0.9219% (+0.0728/wk)

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

* Daily Effective Fed Funds Rate: 0.25%, volume: $82B

* Daily Overnight Bank Funding Rate: 0.20%, volume: $198B

US TSYS: REPO REFERENCE RATES (rate, volume levels reflect prior session):

* Secured Overnight Financing Rate (SOFR): 0.10%, $1.358T

* Broad General Collateral Rate (BGCR): 0.10%, $511B

* Tri-Party General Collateral Rate (TGCR): 0.10%, $489B

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

20-Mar 1000 Feb existing home sales (5.46m, 5.51m)

20-Mar 1100 Q1 St. Louis Fed Real GDP Nowcast

20-Mar 1115 Q1 NY Fed GDP Nowcast (1.32%, --)

PIPELINE: *** Unexpectedly large $18.55B corporate issuance on day, $45.39B/wk

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

03/19 $6B #Walt Disney Co: $1.75B 5Y +270, $500M 7Y +270, $1.25B 10Y +270, $750M

20Y +275 and $1.75B 30Y +285

03/19 $3.5B #UPS: $1B 5Y +325, $750M 10Y +335, $500M 20Y +335, $1.25B 30Y +345

03/19 $2.5B #JP Morgan Chase 11NC10 +340

03/19 $2.25B #Northrop Grumman $750M 10Y +330, $500M 20Y +330, $1B 30Y +340

03/19 $2B #Morgan Stanley 31NC30 +375

03/19 $1.3B #Citigroup 21NC20 +350

03/19 $1B #Metlife Inc 10Y +350

Eurodollar/Tsy options 

Eurodollar options:

* 25,000 Jun 85 puts, 3.5

* 7,000 Apr 86/90 2x1 put spds, 0.5

Latest Block, 1101-1110ET

* total 100,000 May 85/90 put spds, 5.0 vs. 99.34/0.15%

In addition to latest screen trade:

* 10,000 Jun 85/87/90 put trees

* 10,000 Jun 93/95 put spds

* 15,000 Apr 92 puts, 10.0

* +18,000 Jun 77 puts, 1.0

* 10,000 Jun 93/95 put spds, 7.5

Block, 0953:25ET

* 10,250 Apr 92 puts 7.0 over Apr 95/96 1x2 call spds vs. 99.38/0.35%

Block, 0953:25ET

* 14,000 Sep 85 calls 101.5 vs. 99.50 1:1

Block, 0942:01ET

* 10,000 Apr/Jun 82 put spd, 1.0

Block, 0735:24ET, total +40k from 4.0-6.0

* +20,000 Apr 88 puts, 6.0 vs. 99.32/0.19%

* over 12,000 Jun 95/97 1x3 call spds

* 6,000 Jun 95/97/98/100 call condors

* 5,000 each Jun 82 and 83 calls

Latest Block, 0733:23ET switching to calls

* 10,000 Apr 88 calls at 54.0 vs. 99.37/0.86% this after +20k puts at 4.0-4.5

Block, 0708:42-:48ET adds to +10k earlier at 4.0

* +10,000 Apr 88 puts at 4.5 this time vs 99.37

Overnight trade, Block recap

* Block -5,998 Jun 93 puts, 15.5

* Block +10,000 Apr 88 puts, 4.0

* Block 19,250 May 83 puts, 1.75

* Block 30,000 Apr 95/97 1x2 call spds, 6.5

* 20,000 Apr 86/90 2x1 put spds, 0.5

* 5,000 Jun 90/93 put spds vs. Jun 96 calls

Tsy options:

* over 3,000 TYM 128.5/132.5 2x1 put spds, 16

* +5,000 TYJ 133.25 puts from 31- to 34/64

* +3,000 TYK 130 puts, 57/64

Block, 0844-0848ET,

* 17,500 wk3 FV 123.5 calls, 29/64 vs. 123-25/0.64%

Block, 0844:00ET,

* 7,500 wk3 FV 123.5 calls, 29/64 vs. 123-25/0.64%

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

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