US TSYS: MKTS FADE EARLY US/CHINA TRADE HYPE

US TSY SUMMARY: Tsys trading near late session highs, see-sawing higher most of

session after brief mid-morning bout of selling. Risk-off tone gained momentum

mid-morning into midday as equities slid lower (SPX -34.0, 2771.0). Sources

reported largest sell program since mid-February added impetus to move, asset

allocation out of equities into Tsys at work.

- Little to no react to earlier second tier data, focus on US/China trade

w/headlines heralding a deal soon (watching if/when some official on either side

throws cold water on positive sounding headlines). Some desks cite increased

oversight Democratic-driven oversight of Trump admin as well.

- Tsy yield curves continue to inching flatter. Decent deal-tied hedging added

to flow, near $12B in issuance to price, $5B Pfizer 5-part lead in size, TD

Banks, MUFG, John Deere Capital added debt in fronts to intermediates.

- On tap for Tue: March Redbook retail sales; February Markit Services Ind;

building permits revision for Feb and new home sales for Dec (590k est); Feb ISM

Non-manf Index (57.4); Mar IBD/TIPP Optimism Index. Tsy cash/ylds: 2Y 99-29.38

(2.540%), 5Y 99-09.25 (2.526%), 10Y 99-05.5 (2.719%), 30Y 98-09 (3.088%).

US TSY FUTURES CLOSE: Curves continue to flatten with long end extending session

highs into the close. Update:

* 2s10s -2.413, 17.413 (17.413L/20.350H);

* 2s30s -2.377, 54.216 (54.135L/57.129H);

* 5s30s -0.732, 55.741 (55.074L/56.792H);

Current futures levels:

* Jun Ultra bonds up 1-3/32 at 159-19 (158-03L/159-19H)

* Jun 30-yr Bond futures up 20/32 at 144-14 (143-16L/144-15H)

* Jun 10-yr futures up 8.5/32 at 121-29 (121-15.5L/121-29H)

* Jun 5-yr futures up 4.5/32 at 114-14.75 (114-07.25L/114-14.75H)

* Jun 2-yr futures up 1/32 at 106-00.62 (105-30.75L/106-00.75H)

US EURODLR FUTURES CLOSE: Weaker in the short end all day, levels at/near

session highs out the strip. Current White pack (Mar'19-Dec'19):

* Mar'19 -0.010 at 97.395

* Jun'19 -0.005 at 97.380

* Sep'19 +0.005 at 97.375

* Dec'19 +0.015 at 97.340

* Red pack (Mar'19-Dec'20) +0.020-0.035

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

* Blue pack (Mar'21-Dec'21) +0.040-0.035

* Gold pack (Mar'22-Dec'22) +0.040-0.035

US DOLLAR LIBOR: Latest settles

* O/N -0.0024 to 2.3824% (-0.0030 last wk)

* 1 Month +0.0012 to 2.4830% (-0.0025 last wk)

* 3 Month +0.0091 to 2.6076% (-0.0477 last wk)

* 6 Month +0.0005 to 2.6825% (-0.0239 last wk)

* 1 Year +0.0042 to 2.8832% (-0.0126 last wk)

US TSYS: REPO REFERENCE RATES: (rate, volume) 

* Secured Overnight Financing Rate (SOFR): 2.38%, $1.007T

* Broad General Collateral Rate (BGCR): 2.36%, $468B

* Tri-Party General Collateral Rate (TGCR): 2.36%, $449B

US SWAPS: Spds running mixed after the bell, spd curve mildly steeper vs.

flattening in Tsys, holding narrow overall range amid decent 2-way deal-tied

hedging across the curve. Light flow in the first half, quiet start to the week

with two-way in 2s around 2.6425%-.6445%, receiver 5s (2.5830%) and receiver 6s

(2.6206%). Latest spd levels:

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

Mon 3:00    -0.38/8.38    -0.12/4.62     +0.12/0.62    +0.38/-20.12

11:45       +0.31/9.06    -0.06/4.69     +0.12/0.62    +0.50/-20.00

9:30        -0.12/8.62    -0.25/4.50     -0.12/0.38    +0.12/-20.38

Mon Open    +0.19/8.94    +0.06/4.81     +0.06/0.56    +0.31/-20.19

Mon 7:45    +0.00/8.75    +0.19/4.94     +0.06/0.56    +0.12/-20.38

Fri 3:00    -1.00/8.50    -0.62/5.00     -0.25/0.88    -0.31/-20.00

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

05-Mar 0730 Bos Fed Pres Rosengren, current economic landscape, Boston

05-Mar 0855 02-Mar Redbook retail sales m/m (-1.4%, --)

05-Mar 0900 Feb building permits revision

05-Mar 0945 Feb Markit Services Index (final) (56.2, --)

05-Mar 1000 Dec new home sales (657k, 590k)

05-Mar 1000 Feb ISM Non-manufacturing Index (56.7, 57.4)

05-Mar 1000 Mar IBD/TIPP Optimism Index (50.3, --)

05-Mar 1400 Feb Treasury budget balance (-$13.5B, $6.0B)

PIPELINE: $5B Pfizer 5-tranche details; total $11.95B to price Monday

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

03/04 $5B #Pfizer $500m 3Y +28, $750m 5Y +43, $1.75B 10Y +75, $750m 20Y +90,

$1.25B 30Y +100

03/04 $3B #HSBC $2.5B 6NC5 +128, $500m 6NC5 FRN +123

03/04 $1.3B #MUFG Union Bank $1B 3Y +67, $300m 3Y FRN L+60

03/04 $1.25B #TD Bank 5Y +75

03/04 $600m #Duke Energy Progress WNG 10Y +78

03/04 $450M #Union Electric WNG 10Y +78

03/04 $350m *WEC Energy WNG 3Y +60

03/04 $Benchmark John Deere Capital 3Y fix/FRN, 10Y

03/04 $Benchmark Johnson Controls this week

03/04 $Benchmark JFM 5Y +51a

Eurodollar/Tsy options:

Eurodollar options, Pit/screen:

* -3,000 Jun 73 straddles, 8.0

* -5,000 Jul 75 calls, 2.25

* -5,000 Green Mar 76/77 call spds, 1.0

* -3,000 Dec 70/71/72/73 put condors, 3.5

* +3,000 Blue Dec 73 straddles, 43.0

* -2,000 Blue Mar 73 straddles, 49.5

* +10,000 Dec 80 calls, 1.5

* +5,000 Blue Sep 78 calls vs. Gold Sep 77 calls, 1.0 net debit bull curve

steepener

* +13,000 Green Mar 71 puts, cab

* +5,000 Green Mar 71 puts, cab

* +3,000 Green Mar 72 puts, 0.5

* -6,000 Green Jul 72/75 2x1 put spds, 4.0 vs. 97.505

* +5,000 Green Sep 72/75 2x1 put spds, 4.0

* +5,000 short Sep 66/68/71 put flys, 2.5

* +10,000 Sep 71/72 2x1, 1.0

Limited overnight trade

* 6,700 Green Sep 75 calls

* 6,750 Mar 73 calls, 3.5

* 2,000 Dec 72/73 put spds

Tsy options, Pit/screen:

* +15,000 TYK 123 calls, 15/64 on screen at 15/64

* -1,500 TYJ 121/124 strangles, 8/64

* -1,700 TYJ 121.75 puts, 27/64

* +1,000 TUK 105.25/105.62/106 put flys w/TUK 106/106.38/106.75 call flys,

11/64db

* +1,100 TYM 119.5/120.5/121.5 put trees, 10/64

* +3,500 TYM 120 puts, 17/64 earlier

* -4,000 TUM 105.75 puts, 5/64

* +2,500 TUM 105.75/106 2x1 put spds, 0.5

* 7,000 FVJ 114.25 puts, 13/64

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

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