US TSYS: NAVARRO ON FED, CAN YOU HEAR ME TALKING?

US TSY SUMMARY: Quiet end to the last full trading week of 2019: Off early lows

-- US Tsys mildly weaker by the closing bell amid choppy sideways trade on a

fairly narrow range and certainly light volume (TYH<650) by the bell. Equities

made new highs, active trade heading into quadruple-witching expiration (ESH0

+16.5 late)

- Little to no react to 3Q GDP Unrevised at +2.1%; Nov Personal Income Above

Expected At +0.5% (0.3% Est). 

- No Fed speakers, no deal-tied hedging, and no noticeable react to headlines

for once: "Had a very good talk with President Xi of China concerning our giant

Trade Deal" Trump on Twitter; "FED HAS GOTTEN THE MESSAGE FROM TRUMP TO LOWER

RATES: NAVARRO" Bbg; "ROSS: COULD ADD TARIFFS IF CHINA DOESN'T UPHOLD TRADE

DEAL" Bbg.

- Sizable Block buys: +7,200 FVH 118-10.75 and +6,000 FVH 118-11.75 helped Tsy

futures move off midmorning session lows. Otherwise modest two-way positioning

ahead weekend and holidays next two weeks kept futures in line. The 2-Yr yield

is down 0.2bps at 1.6253%, 5-Yr is down 0.5bps at 1.727%, 10-Yr is down 0.5bps

at 1.9153%, and 30-Yr is down 1bps at 2.3443%.

TECHNICALS

US 10YR FUTURE TECHS: (H0) Focus Remains On Key Support

*RES 4: 130-04+ High Dec 3

*RES 3: 129-14   High Dec 12 and near-term bull trigger

*RES 2: 129-02   High Dec 13

*RES 1: 128-23+ High Dec 17

*PRICE: 128-06 @ 15:40 GMT, Dec 20

*SUP 1: 127-29   Low Dec 13 and bear trigger

*SUP 2: 127-18+ 1.618 projection of the Oct 3 to Nov 7 low from Dec 3 high

*SUP 3: 127-00   Round number support

*SUP 4: 126-31+ 1.764 projection of the Oct 3 to Nov 7 low from Dec 3 high

10yr futures are under pressure once again following yesterday's bounce ahead of

key support at 127-29, Dec 13 low. Attention returns to this support which if

cleared would confirm a resumption of the broader downtrend and open 127-18+, a

Fibonacci projection and, the 127-00 level. On the upside, initial resistance is

seen at 128-23+ however, a break above 129-14, Dec 12 high is needed to reverse

the outlook.

AUSSIE 3-YR TECHS: (H0) Vulnerability Resumes

*RES 4: 99.400 - Low Nov 29

*RES 3: 99.360 - High Dec 12

*RES 2: 99.335 - High Dec 13 

*RES 1: 99.300 - High Dec 17

*PRICE: 99.140 @ 15:41 GMT Dec 20

*SUP 1: 99.125 - Low Dec 20

*SUP 2: 99.120 - 1.500 projection of Nov 29 - Dec 3 decline from Oct 25 high

*SUP 3: 99.080 - 200-dma 

*SUP 4: 99.070 - Low Nov 8

Selling pressure was evident into the Friday close, pressuring prices to new

weekly lows of 99.120 as the outlook returns to bearish. The slip through 99.200

Thursday is significant and prefaced a show below 99.162. This opens the 99.120

Fibonacci projection level and the 200-dma below at 99.080. On the upside,

resistance is at 99.335, Dec 13 high.

AUSSIE 10-YR TECHS: (H0) Cracks Key Support

*RES 3: 98.9500 - High Dec 5

*RES 2: 98.8950 - High Dec 10 and 11

*RES 1: 98.8850 - High Dec 5

*PRICE: 98.6750 @ 15:50 GMT, Dec 20

*SUP 1: 98.6550 - Low Dec 20 

*SUP 2: 98.6500 - Low Nov 8/11

*SUP 3: 98.5785 - 3.0% Lower Bollinger Band

Aussie 10yr futures weakened further for a particularly negative close Friday,

edging below the 200-dma for the first time in over a year. This switches the

picture to outright bearish and opens further losses down to levels not seen

since mid-July. The RSI is also yet to indicate oversold conditions, meaning the

run lower could still have legs. For bulls to slow any decline they first need

to recoup the 200-dma before eyeing the Dec 5 at 98.8850.

JGB TECHS: (H0): Outright Bearish

*RES 3: 153.55 - High Nov 28 and key resistance

*RES 2: 153.11 - High Dec 4

*RES 1: 152.50 - High Dec 9

*PRICE: 151.74 @ 16:16 GMT, Dec 20

*SUP 1: 151.62 - Contract lows, Dec 20

*SUP 2: 151.11 - 76.4% August 2018 - September 2019 Rally

*SUP 3: 150.61 - 1.0% lower 10-dma envelope

The outlook for JGB futures flipped to outright bearish Friday as losses

persisted into the close. This opens renewed pressure south of the 151.00 handle

to levels not seen since December last year. A clear downtrend remains in  place

though with a price sequence of lower lows and lower highs evident. The trigger

for a fresh round of weakness turns to the 151.11 Fib retracement. A break here

would open the 1.0% lower 10-dma envelope at 150.61.

TSY FUTURES CLOSE: Off early lows to steady/mixed by the bell in light holiday

volume (TYH<665k) in late trade. Yld curves scaling back small portion week's

steepening with long end marginally higher. Update:

* 3M10Y  -1.438, 33.947 (L: 33.052 / H: 37.095)

* 2Y10Y  -0.536, 28.416 (L: 28.385 / H: 30.374)

* 2Y30Y  -1.084, 71.199 (L: 71.126 / H: 73.246)

* 5Y30Y  -0.774, 61.269 (L: 60.880 / H: 62.554)

Current futures levels:

* Mar 2-Yr futures down 0.875/32  at 107-20.5 (L: 107-19.5 / H: 107-21.125)

* Mar 5-Yr futures down 2/32  at 118-11.75 (L: 118-08 / H: 118-13)

* Mar 10-Yr futures down 2.5/32  at 128-7.5 (L: 127-31 / H: 128-08.5)

* Mar 30-Yr futures steady at  at 156-9 (L: 155-19 / H: 156-10)

* Mar Ultra futures up 2/32  at 182-26 (L: 181-20 / H: 182-27)

US EURODLR FUTURES CLOSE: Mildly weaker by the close -- off early session lows.

Lead quarterly EDH0 under pressure all session after 3M LIBOR set +0.0070 to

1.9347% (+0.0351/wk). Current White pack (Mar 20-Dec 20):

* Mar 20 -0.005 at 98.235

* Jun 20 -0.010 at 98.30

* Sep 20 -0.015 at 98.350

* Dec 20 -0.015 at 98.360

* Red Pack (Mar 21-Dec 21) -0.025 to -0.015

* Green Pack (Mar 22-Dec 22) -0.015

* Blue Pack (Mar 23-Dec 23) -0.015 to -0.01

* Gold Pack (Mar 24-Dec 24) -0.01 to -0.005

US DOLLAR LIBOR: Latest settles

* O/N +0.0026 at 1.5366% (+0.0068/week)

* 1 Month -0.0053 to 1.7791% (+0.0424/wk)

* 3 Month +0.0070 to 1.9347% (+0.0351/wk)

* 6 Month +0.0043 to 1.9206% (+0.0377/wk)

* 1 Year +0.0016 to 1.9996% (+0.0358/wk)

US SWAPS: Spds running wider by the bell, spd curve steeper vs. mildly flatter

Tsy curves, some light spec acct paying in 10s and 30s after midday. Latest spd

levels:

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

Fri 1500    +0.50/+7.19    +0.81/-0.06   +0.81/-4.19    +1.00/-29.00

1200        +0.62/+7.31    +0.50/-0.38   +0.50/-4.50    +0.62/-29.38

1000        +0.69/+7.38    +0.50/-0.38   +0.50/-4.50    +0.75/-29.25

Fri Open    +0.62/+7.31    +0.38/-0.50   +0.50/-4.50    +0.50/-29.50

Fri 0715    +0.69/+7.38    +0.44/-0.44   +0.50/-4.50    +0.50/-29.50

Thu 1500    +0.56/+7.19    +0.38/-0.62   +0.19/-4.94    +0.00/-30.00

Thursday recap: Not much to write home about for swaps Thu, spds inch wider for

most part, long end lagging and is back to steady by the bell. Tentative

normalization as LIBOR inches higher w/short end adjusting lower as chances of

rate cuts in 2020 recede.

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

* Daily Effective Fed Funds Rate: 1.55%, volume: $73B

* Daily Overnight Bank Funding Rate: 1.54%, volume: $178B

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

* Secured Overnight Financing Rate (SOFR): 1.53%, $988B

* Broad General Collateral Rate (BGCR): 1.50%, $384B

* Tri-Party General Collateral Rate (TGCR): 1.50%, $362B

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

23-Dec 0830 Nov durable goods new orders (0.5%, 1.5%)

23-Dec 0830 Nov durable new orders ex transport (0.5%, 0.2%)

23-Dec 0830 Dec Philadelphia Fed Nonmfg Index

23-Dec 0900 Nov bldg permits revision 

23-Dec 1000 Nov new home sales (0.733m, 0.730m)

PIPELINE: High grade issuance for week: $0.0 priced/wk; $21.07B/month

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

12/20 No new US$ issuance for the week

Eurodollar/Tsy options 

Eurodollar options:

* +5,000 Jun 80/82 2x1 put spds, 3.0

* +2,500 short Feb 83/85 strangles, 11.0

* +4,000 Sep 86/88/91 call flys, 1.25 legged

* 5,000 Feb 82/83 call spds, 2.0

* 5,000 Mar 82/83 call spds, 2.5

3-way package:

* 6,000 Jan 82/83 call spds, 1.25

* 3,000 Feb 82/83 call spds, 1.75

* 3,000 Mar 82/83 call spds, 2.0

* 4,000 short Mar/Green Mar 87 call spds, 0.5 vs.

* 4,000 short Mar/Green Mar 83 straddle spds

* 5,000 Mar 83/85 call spds, 0.75

* 5,000 Jun 86/87 call spds, 0.75

Tsy options:

* 2,100 TYF 128.5/TYH 128 put spds, 22/64

* -5,000 FVF 118 puts, 1/64 earlier on screen

Block, 0946:37ET,

* +15,000 wk2 TY 126.75/127.75 put spds, 14/64 vs.

* +3,000 TYH 127 puts, 26/64

* +4,000 USF 154.5/157 call over risk reversals, 9/64 vs. 156-05/0.39%

* +2,000 TYH 126/130 call over risk reversals, 0.0

* 6,000 TYG 127/129 put over risk reversals, 1/64

* +3,000 TYG 127.5/129.5 put over risk reversals, 5/64

* 4,000 FVG 118.5/118.75 call strip, 24/64 vs. 118-09

Recap overnight flow, Blocks

* Blocks total 22,500 TYG 126.5/127.5 put spds 4- to 6/64 over TYG 129.5 calls

* 10,000 TYG 127 puts, 14/64

* 6,000 TYG 128.5 calls, 10/64

* 3,500 TYG 126.7/127.5 3x2 put spds

* 2,000 TYF 129.5/132.25/130.5 broken call trees

* 6,500 TYH 132.5 calls, 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$]