US TSYS: MON/POL BY FIAT? PRES TRUMP WANTS LOWER RATES

US TSY SUMMARY: Tsy near late session highs after the bell amid heavy month-end

buying (TYM>200k from 123-21 to -22; >120k FVM from 115-20 to -21). Curves

mostly adding to Mon's bear steepening, 3M10Y flatter. Relative quiet at start

of two-day FOMC. 

- Early blocks included ongoing FVM selling, 5s10s flatteners -- reversed late

on month end bid. Tsys surged well ahead of large PMI miss (52.6 vs. 58.5

est),large equity sell program added to rate bid but equities recovered from

late morning on (SPX +2.0 late at 2945.0).

- Swaps wider amid better rate paying and deal-tied flow, some receiver unwinds

and two-way fly trade in fronts to intermediates. Other buying/short unwinds as

EFFR climbed to 2.45%, spurring increased chatter of IOER cut.

- On tap for Wednesday: MBA Mortgage Applications; ADP private payrolls; Markit

Mfg Index (final); construction spending; ISM Manufacturing Index; NA-made light

vehicle sales SAAR; FOMC policy announcement.

- The 2-Yr yield is down 2.6bps at 2.2661%, 5-Yr is down 3.3bps at 2.2783%,

10-Yr is down 2.3bps at 2.5018%, and 30-Yr is down 2.4bps at 2.9311%.

US TSY FUTURES CLOSE: Trading near late session highs after the bell amid heavy

month-end buying (TYM>200k from 123-21 to -22; >120k FVM from 115-20 to -21),

Blocks w/+27,600 FVM 115-20.75, 6,500 TYM 123-21.5, 3,700 UXYM 131-25.5. Curves

mildly steeper for most part, latest levels:

* 3M10Y  -2.772, 8.344 (L: 6.625 / H: 11.567)

* 2Y10Y  +0.651, 23.749 (L: 22.658 / H: 24.257)

* 2Y30Y  +0.692, 66.741 (L: 65.906 / H: 67.629)

* 5Y30Y  +1.374, 65.523 (L: 63.573 / H: 66.219)

Current futures levels:

* Jun 2-Yr futures (TU) up 1.75/32  at 106-16.25 (L: 106-13.375 / H: 106-16.625)

* Jun 5-Yr futures (FV) up 5.25/32  at 115-20.75 (L: 115-12.25 / H: 115-21.25)

* Jun 10-Yr futures (TY) up 7.5/32  at 123-21.5 (L: 123-10 / H: 123-23)

* Jun 30-Yr futures (US) up 18/32  at 147-17 (L: 146-24 / H: 147-19)

* Jun Ultra futures (WN) up 26/32  at 164-13 (L: 163-09 / H: 164-16)

US EURODLR FUTURES CLOSE: Sitting at/near session highs by the close, front end

lagging. Current White pack (Jun'19-Mar'20):

* Jun 19 +0.005 at 97.455

* Sep 19 +0.010 at 97.535

* Dec 19 +0.015 at 97.560

* Mar 20 +0.025 at 97.675

* Red Pack (Jun 20-Mar 21) +0.030 to +0.035

* Green Pack (Jun 21-Mar 22) +0.030 to +0.035

* Blue Pack (Jun 22-Mar 23) +0.030 to +0.035

* Gold Pack (Sep 22-Jun 23) +0.025 to +0.030

US DOLLAR LIBOR: Latest settles

* O/N -0.0106 at 2.3791% (-0.0209/wk)

* 1 Month -0.0053 to 2.4805% (-0.0026/wk)

* 3 Month -0.0034 to 2.5756% (-0.0071/wk)

* 6 Month +0.0100 to 2.6220% (+0.0063/wk)

* 1 Year +0.0038 at 2.7168% (-0.0007/wk)

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

* Secured Overnight Financing Rate (SOFR): 2.48%, $968B

* Broad General Collateral Rate (BGCR): 2.46%, $469B

* Tri-Party General Collateral Rate (TGCR): 2.46%, $448B

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

01-May ---- FOMC policy meeting day 2

01-May  -   Apr NA-made light vehicle sales SAAR

01-May 0700 26-Apr MBA Mortgage Applications (-7.3%, --)

01-May 0815 Apr ADP private payrolls (129k, --)

01-May 0945 Apr Markit Mfg Index (final) (52.4, --)

01-May 1000 Mar construction spending (1.0%, 0.2%)

01-May 1000 Apr ISM Manufacturing Index (55.3, 55.3)

01-May 1030 26-Apr crude oil stocks ex. SPR w/w

01-May 1300 FOMC policy announcement

US SWAPS: Spds on wides by the bell amid better rate paying and deal-tied flow,

some receiver unwinds and two-way fly trade in fronts to intermediates --

squaring up ahead Wed's FOMC. Latest spd levels:

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

Tue 3:00    +1.00/11.38   +0.88/4.12     +0.19/-1.38   +0.31/-23.69

1:45        +0.94/11.31   +0.50/3.75     +0.06/-1.50   +0.19/-23.81

11:45       +0.81/11.19   +0.50/3.75     +0.12/-1.44   +0.31/-23.69

10:15       +0.81/11.19   +0.25/3.50     +0.06/-1.50   +0.31/-23.69

Tue Open    +0.75/11.12   +0.12/3.38     -0.19/-1.75   +0.12/-23.88

Mon 3:00    -0.12/10.25   -0.31/3.12     -0.50/-1.75   -0.62/-24.00

Monday recap: Spds running mildly tighter, at/near narrows by the close, long

end leading move. Light flow on net, some deal-tied flow earlier, 2s4s5s

receiver fly in second half.

PIPELINE: $3.5B Boeing 5-part launched; Northern Trust priced

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

04/30 $3.5B #Boeing 5-part: 

----  $600M 3Y +52, $650M 7Y +75, $600M tap 10Y +85, $850M 15Y +112,$800M  30Y

+107

04/30 $1.25B #Ford Motor Cr 10Y +260

04/30 $750M #Aon Corp 10Y +125

04/30 $300M #Textron WNG 10Y +140

04/30 $500M *Northern Trust WNG 10Y +65

04/30 $Benchmark Barclays 6NC5 +180a

04/30 $1.25B MGM China 5NC2, 7NC3

Eurodollar/Tsy options:

Eurodollar options, Pit/screen: 

* +10,000 short Dec 71/73/76 put flys, 4.5

* +13,000 May 75 calls, 0.75 earlier

* Update, total +15,000 Mar 77/80/82/85 call condors, 4.5

* +5,500 Mar 77/80/82/85 call condors, 4.5 looking for more

* -6,500 short Dec 75/78 2x1 put spds, 10.5

* +20,000 (pit/screen) Jul/Aug 77 call spds, 1.0

* -6,500 short Dec 75/78 2x1 put spds, 10.5

* +5,000 short Jun 77 puts, 11.0 vs. 97.72/0.55%

* +2,000 Sep/short Sep 80 call spds, 0.0

* +3,000 Red Jun 77 straddles, 46.5

* 18,500 Aug 77/80 1x2 call spds, 1.25 vs. 97.515

* 5,000 Dec 76/77/78 call flys, 1.5 vs. 97.61/0.05%

* -5,000 Dec 83 calls, 1.0

* +5,000 Green May 77/80 call over risk reversals, 2.5

Pre-open screen trade:

* 9,500 Mar 70/72 put spds

* 7,000 Oct/Dec 72/73 put spd spd

* 1,250 Blue Sep 71/72/73/75 put condors

* +5,000 Jun 73/75 2x3 call spds, 11.0 pre-data

Tsy options, Pit/screen:

BLOCK, 1330:54ET

* -10,000 TYQ 123/125 put over risk reversals, 4/64 vs. 123-19.5/0.60%

* 4,000 USN 145/149 put over risk reversals, 4.0 vs. 147-14/0.51%

* -6,000 TYM 123.5 calls, 30/64 on screen

* +2,500 FVM 114.5/114.75/115 put trees, 0.0

* 2,000 TYM 123/TYN 122.5 put spds, 0.0

* -3,500 TYN 122 puts, 11/64 vs. 123-18/0.14%

* +4,000 TYM 128.25 calls, 1/64 earlier

* +4,000 wk2/wk3 TY 124 call spds

* 2,500 TUN 106.25/106.5 2x1 put spds, 3/64

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

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