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US TSYS: MKT WARY US/CHINA TRADE DEAL DELAY, RISK-OFF!

US TSY SUMMARY: Tsy futures continued to extend session highs to just past
midday as equities tumbled (ESZ9 -45.0) triggered largely on early US/China
trade headlines that US going forward with Dec 15 tariffs. Levels off extremes
after the bell (ESZ9 bounces to -22.0) while Tsy futures remained well bid
across the board, little off highs -- but more than making up for Mon's sale as
Trump tried to downplay importance of getting trade deal done quickly. 
- Sharp Eurodollar futures rally on heavy volume (>28k 2Y bundles; >24k Red
packs), rally more than 2x Mon's sale. late block +10k EDZ9/EDF0 spds +0.077.
- Swap spds reversed early widening to tighter by mid-am amid better
receiving/payer unwinds/stop-outs across the curve. Short end held tighter late
5s-30s rebounded wider amid late swap-tied selling as Tsys support cooled. 
- While Fed remains in blackout through Dec 12, at least mkts will see Nov ADP
private payrolls (125k prior, 140k est) early Wed. The 2-Yr yield is down 6.2bps
at 1.538%, 5-Yr is down 10.3bps at 1.5392%, 10-Yr is down 10.5bps at 1.7139%,
and 30-Yr is down 10bps at 2.1664%.
TECHNICALS
US 10YR FUTURE TECHS: (H0) Fearsome Rally
*RES 4: 131-11+ 76.4% Sep - Nov Decline
*RES 3: 130-15+ High Nov 1
*RES 2: 130-06+ 50% Sep - Nov Decline
*RES 1: 130-04   High Dec 3 and key bull trigger
*PRICE: 130-01+ @ 16:44 GMT, Dec 3
*SUP 1: 128-26   Intraday low
*SUP 2: 128-23+ Low Dec 2 and key near-term support
*SUP 3: 128-14+ 61.8% retracement of Nov 7 - Nov 21 rally
*SUP 4: 128-03+ Low Nov 12
10yr futures bounced sharply Tuesday, erasing fully Monday's move lower. The
rebound in price action has defined a potential turning point at 128-23+ (the
week's low). The pullback off the Nov 21 high retraced to just below 61.8% of
the climb between Nov 7 - Nov 21. The fact that the retracement has essentially
remained in place, implies the recent move lower has been a correction. If
support can hold, further gains would open north of the 130-00 mark, with the
key bull trigger sitting at the Tuesday high of 130-04.
AUSSIE 3-YR TECHS: (Z9) Modest Bounce
*RES 4: 99.472 - 123.6% Projection
*RES 3: 99.464 - 3.0% Upper Bollinger Band
*RES 2: 99.460 - Alltime High Oct 7 
*RES 1: 99.395 - High Nov 27
*PRICE: 98.315 @ 16:07 GMT Dec 3
*SUP 1: 99.165 - Low Nov 13
*SUP 2: 99.130 - Low Nov 12
*SUP 3: 99.070 - Low Nov 8 and key support
*SUP 4: 99.055 - 1.00 projection of Oct 8 - Oct 22 decline from Oct 25 high
After a drubbing on Monday, global bond markets staged a modest bounce Tuesday,
keeping Aussie three-year futures within the recent range. Nonetheless, focus
remains on the recent lows as the recent run-up to 99.395 now looks to be over.
Prices trade either side of the 99.30 level at present, denting the outlook
materially. 99.165 seen as the next key support. 
AUSSIE 10-YR TECHS: (Z9) Looks More Stable After Bounce
*RES 3: 99.0413 - 2.0% Upper Bollinger Band
*RES 2: 99.0358 - 76.4% retracement of the Oct 8 - Nov 11 decline
*RES 1: 99.0150 - High Nov 28
*PRICE: 98.9350 @ 16:20 GMT, Dec 3
*SUP 1: 98.7679 - Former channel resistance 
*SUP 2: 98.6850 - Low Nov 13
*SUP 3: 98.6500 - Low Nov 8 and primary support
Aussie 10yr futures bounced well in the Tuesday session, giving bears some pause
as prices look slightly more stable. It still looks too soon to call for an
extension of the recent recovery, however, after markets rejected any major test
on the mid-October highs in the first half of last week. Nonetheless, prices
show little sign of retreating much further with former channel
resistance-turned-support at 98.7679 holding for now. Momentum will be needed
before the outlook turns convincingly positive, with bulls needing to reclaim
99.0150.
JGB TECHS: (Z9): Pullback Appears Limited
*RES 3: 154.68 - 1.0% 10-dma moving average
*RES 2: 153.93 - High Nov 6
*RES 1: 153.64 - High Nov 21
*PRICE: 153.10 @ 16:27 GMT, Dec 3
*SUP 1: 152.39 - Low Dec 4
*SUP 2: 152.30 - 3.0% Lower Bollinger Band
*SUP 3: 152.25 - Contract Lows
After clocking four sessions of lower lows, JGBs bounced slightly Tuesday, but
the recovery was infitting with the moves in global bond markets. This keeps the
technical picture broadly unchanged, although a further drop below the 152.39
mark will tilt negative. For bulls to regain any composure, markets must top the
Nov 6 high at 153.93.
US TSY FUTURES CLOSE: Well bid across the board, little off highs -- but more
than making up for Mon's sale. Yld curves mostly flatter/off lows. Update:
* 3M10Y  -8.923, 14.721 (L: 10.449 / H: 25.505)
* 2Y10Y  -3.696, 17.595 (L: 16.543 / H: 22.901)
* 2Y30Y  -3.095, 62.908 (L: 61.356 / H: 67.54)
* 5Y30Y  +0.424, 62.627 (L: 61.372 / H: 64.267)
Current futures levels:
* Mar 2-Yr futures up 5.125/32 at 107-29 (L: 107-23.125 / H: 107-30.5)
* Mar 5-Yr futures up 18.25/32 at 119-10.75 (L: 118-22.5 / H: 119-15.25)
* Mar 10-Yr futures up 1-2/32 at 129-31 (L: 128-26 / H: 130-04.5)
* Mar 30-Yr futures up 2-17/32 at 159-30 (L: 157-08 / H: 160-13)
* Mar Ultra futures up 4-0/32 at 188-26 (L: 184-18 / H: 189-25)
US EURODLR FUTURES CLOSE: Sharply higher across the strip on heavy volume (>28k
2Y bundles; >24k Red packs), rally more than 2x Mon's sale. late block buyer
10,000 EDZ9/EDF0 spds +0.077. Current White pack (Dec 19-Sep 20):
* Dec 19 +0.020 at 98.120
* Mar 20 +0.045 at 98.320
* Jun 20 +0.075 at 98.440
* Sep 20 +0.095 at 98.535
* Red Pack (Dec 20-Sep 21) +0.105 to +0.125
* Green Pack (Dec 21-Sep 22) +0.130 to +0.135
* Blue Pack (Dec 22-Sep 23) +0.130 to +0.135
* Gold Pack (Dec 23-Sep 24) +0.130 to +0.140
US SWAPS: Swap spds reversed early widening to tighter by mid-am amid better
receiving/payer unwinds/stop-outs across the curve. Short end held tighter late
5s-30s rebounded wider amid late swap-tied selling as Tsys support cooled.
Latest levels:
Time (ET)   2Y Swap/Mid    5Y Swap/Mid   10Y Swap/Mid   30Y Swap/Mid
Tue 1500    -1.06/+1.31    +0.12/-3.12   +0.19/-7.56    +0.38/-33.75
1100        -0.53/+1.81    -0.06/-3.31   -0.69/-8.44    -0.75/-34.88
1000        -0.16/+2.19    +0.25/-3.00   -0.50/-8.25    -0.56/-34.69
Tue Open    +0.40/+2.75    +0.56/-2.69   +0.44/-7.31    +0.38/-33.75 
Mon 1500    +1.75/+2.00    -0.12/-3.50   -0.88/-7.88    -1.31/-34.31
US DOLLAR LIBOR: Latest settles
* O/N -0.0021 at 1.5385% (-0.0040/wk)
* 1 Month +0.0098 to 1.7036% (+0.0064/wk)
* 3 Month -0.0086 to 1.8915% (-0.0140/wk)
* 6 Month -0.0104 to 1.8954% (-0.0011/wk)
* 1 Year -0.0259 to 1.9366% (-0.0155/wk)
STIR: Federal Reserve Bank of New York EFFR for prior session:
* Daily Effective Fed Funds Rate: 1.55%, volume: $71B
* Daily Overnight Bank Funding Rate: 1.54%, volume: $171B
US TSYS: REPO REFERENCE RATES: (rate, volume),
* Secured Overnight Financing Rate (SOFR): 1.63%, $1.104T
* Broad General Collateral Rate (BGCR): 1.60%, $427B
* Tri-Party General Collateral Rate (TGCR): 1.60%, $397B
OUTLOOK: *** US Data/speaker calendar (prior, estimate):
04-Dec 0700 29-Nov MBA Mortgage Applications (1.5%, --)
04-Dec 0815 Nov ADP private payrolls (125k, 140k)
04-Dec 0945 Nov Markit Services Index (final) (51.6, 51.6)
04-Dec 1000 Nov ISM Non-manufacturing Index (54.7, 54.5)
04-Dec 1000 Dec help-wanted online ratio
04-Dec 1000 Fed VC Quarles testimony before House Fncl Serv's Comm on
supervision & reg'n
04-Dec 1030 29-Nov crude oil stocks ex. SPR w/w
PIPELINE: Waiting on $2.3B to price still, BB&T leads; $5.9B on day
Date $MM Issuer/Rating/Desc/Maturity/Yld; Priced *; Launch #:
12/03 $1.25B #Branch Banking & Trust 5Y +65
12/03 $750M #Experian Finance +10Y +115
12/03 $300M #Wisconsin Electric Power Co WNG 5Y +52
12/03 $1.5B *China Huaneng $400M 3Y +88, $500M 5Y +103, $600M 10Y +125
12/03 $1.05B *China Resources Land 5Y 3.75%
12/03 $600M *Bocom Financial Leasing 5Y FRN L+107.5
12/03 $450M *AEP Texas WNG 30Y +130
12/?? $600M Twitter 8NCL may price Dec 5
Eurodollar/Tsy options: 
Eurodollar Options
* +20,000 Jun 90 calls, 2.5
* +5,000 Jun 80 puts, 1.0
* +10,000 Jun 85/87/90 call flys, 8.5
Blocks, 1418:46ET ongoing buy interest
* +10,000 Mar 80 puts, 0.5
* BLOCK: 10,000 Mar 86/90 call spds, 1.25 vs. 98.305/0.10%
* +7,500 Mar 85/87/88 broken call flys, 1.5
* -10,000 Sep 90 calls, 5.0 vs. 98.48/0.20%
* -3,000 short Dec 83/85 2x1 put spds, 2.5
* +5,000 Jun 90 calls, 2.5
* -6,000 Jun 82 puts, 4.5
* +3,000 Blue Dec 83/86 call over risk reversals, 0.0 vs. 98.485/0.40%
* 5,000 short Dec 81/88 call spds, 38.0
* +5,000 Mar 80 puts, 0.5
* 4,000 Dec 81/82 call spds, 1.5
Additional earlier flow
* +10,000 Apr 82 puts, 3.25
* +8,000 Apr 82 puts, 3.25
* +5,000 Jun 81/82/83 put flys, 3.75
* +5,000 short Mar 82/83/85 put flys, 2.0
Blocks, 0859-0900ET
* +47,000 Feb 85/86/87 call trees, cab
In Pit:
* +11,000 Jun 87/90 call strip, 6.5
* 10,000 Jun 82/83 put spds, 6.5 vs.98.40/0.10%
* +2,500 Mar 83/85/86 call flys, 1.5
* +2,000 Dec 81 straddles, 4.25
* -2,000 Green Jan 85 straddles, 20.0
Block, 0828:53ET
* +10,000 short Dec 86/87 call spds, 1.5 vs. 98.51/0.10%
Block, 0717:31ET -- adds to appr 13k on screen
* 5,000 Jun 85/87 call spds, 5.0 vs. 98.395/0.20%
Tsy options:
* Update, total +10,000 wk2 TY 128.5/129 put spds, 6.5-7
* -1,400 TYF 129.75 straddles, 113-112
* -2,000 TYG 128/131 strangles,  vs. +1,000 TYF 129.5 straddles, 6/64 net
* +1,200 TYF 130 calls, 27/64
* +1,000 TUF 107.8/108/108.12/108.25 call condors, 2/64
--MNI Chicago Bureau; tel: +1 312-431-0089; email: bill.sokolis@marketnews.com
[TOPICS: MTABLE,M$U$$$,M$$FI$,MN$FI$,MN$FX$]

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