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US TSYS: QUIET START TO WK, $15B BAYER 8-PART WEIGHS

US TSY SUMMARY: Quiet start to wk, Tsys reverse early risk-off bid on $15B Bayer
8-part issuance. Early support on trade war concerns w/China, muted volume
w/China out on holiday. Data limited to housing items, BoE policy annc Thu.
- US$ off (DXY -.030, 94.758; US$/Yen -0.14, 110.51); equities off lows (emini
-10.25, 2774.25); gold near steady (XAU -0.06, 1279.48); West Texas crude firmer
(WTI +0.74, 65.80 vs. 63.59L).
- Long end Tsy bid evaporated, slipped to session lows mid-late morning as
incoming supply from Bayer 8-tranche (3Y-30Y) spurred spec acct sales before
$15B issuance annc'd (Historical context, top 3 mega deals: $49B Verizon from
Sep 11, 2013; $46B AB InBev from Jan 13; March 6 $40B CVS 9-Part CVS). Equities
trimmed steeper losses (FANG shares kicked it off), adding to reversal in rates.
Less certain signal, US$/Yen is see-sawing off lows 110.47 last. Bit of a
dead-cat bounce for curves moving off lows at moment but likely to resume longer
term flattening w/inversion a real possibility in near term. 
- Tsy cash/ylds: 2Y 99-28.5 (2.553%), 5Y 99-24.75 (2.799%), 10Y 99-17 (2.928%),
30Y 101-09.5 (3.058%)
US TSY FUTURES CLOSE: Trading mixed with the short end outperforming the long
end, curves mixed, update:
* 2s10s -0.282, 36.849 (35.503L/37.630H);
* 2s30s +0.039, 49.772 (48.245L/50.821H);
* 5s30s +0.790, 25.529 (24.341L/26.176H);
Current futures levels:
* Sep Ultra bonds down 5/32 at 157-19 (157-10L/158-10H)
* Sep 30-yr Bond futures down 1/32 at 143-20 (143-14L/144-03H)
* Sep 10-yr futures up 0.5/32 at 119-19.5 (119-18L/119-25H)
* Sep 5-yr futures up 0.5/32 at 113-08.25 (113-07.5L/113-11.25H)
* Sep 2-yr futures up 0.5/32 at 105-26.75 (105-26.25L/105-27.75H)
US EURODOLLAR FUTURES CLOSE: : Trading steady to slightly higher, short end a
bit higher while Greens through Golds are steady. Current White pack
(Sep'18-Jun'19):
* Sep'18 +0.005 at 97.530
* Dec'18 0.000 at 97.335
* Jun'19 +0.005 at 97.200
* Jun'19 +0.005 at 97.095
* Red pack (Sep'19-Jun'20) +0.005-EVEN
* Green pack (Sep'20-Jun'21) EVEN
* Blue pack (Sep'21-Jun'21) EVEN
* Gold pack (Sep'22-Jun'22) EVEN
US DOLLAR LIBOR: Latest settles,
* O/N -0.0001 to 1.9255% (+0.2106 last wk)
* 1 Month -0.0012 to 2.0837% (+0.0388 last wk)
* 3 Month -0.0012 to 2.3247% (-0.0004 last wk)
* 6 Month -0.0069 to 2.4968 (+0.0150 last wk)
* 1 Year -0.0004 to 2.7718% (+0.0320 last wk)
US TSYS: *** /REPO REFERENCE RATES: (rate, volume)
* Secured Overnight Financing Rate (SOFR): 1.91% vs. 1.90% prior, $802B
* Broad General Collateral Rate (BGCR): steady at 1.87%, $386B
* Tri-Party General Collateral Rate (TGCR): steady at 1.87%, $366B
US SWAPS: Spds steady/mixed by the bell, off early wides but maintaining narrow
range all session. Mixed flow all session, scale payers in 2s around
2.8185-2.82055%, payer in 3s at 2.9015%. Decent two-way curve flow: 2-way 2s3s,
3s and 5s vs. 10Y steepeners, 4s7s flatteners and steepeners in 5s vs. 9s and
10s. Deal-tied flow in the mix into $15B 8-tranche Bayer issuance. Latest spd
levels:
* 2Y  -0.56/26.50
* 5Y  +0.44/14.50
* 10Y +0.25/6.50
* 30Y +0.00/-6.25
PIPELINE: Jumbo Bayer AG 8-tranche to price today, hear $15B vs. over $50B
interest
Date $MM Issuer/Rating/Desc/Maturity/Yld/Leads; Priced *; Launch #:
06/18 $1B Duke Energy Florida, WNG 10Y fix +100a, 30Y fix +125a
06/18 Bayer US Finance 8-part, to "simplify its capital structure" after closing
it's $63B Monsanto buyout:
      3Y fix +105a, 3Y FRN Libor equiv, 5.5Y fix +130a, 5.5Y FRN Libor equiv,
      7.5Y +150a, 10.5Y +165a, 20Y +190a, 30Y +205a
OUTLOOK: Data/speaker calendar (prior, estimate): 
- Jun 19 StL Fed Pres Bullard, Price/Wage Setting, '18 ECB Forum/CB, Portugal
0700ET
- Jun 19 May housing starts (1.287m, 1.320m) 0830ET
- Jun 19 May building permits (1.364m, --) 0830ET
- Jun 19 16-Jun Redbook retail sales m/m (-0.2%, --) 0855ET
Eurodollar/Treasury Option Summary
Eurodollar options, Pit/screen:
* +20,000 Short Sep 68/70 put sprd vs Green Sep 68/70 put sprd for net 1.5 vs
9694/0.10%
* 10,000 Short Dec 67/Front Dec 72 put strip at 3
* 7,000 Blue Mar 65/75 put over risk reversal at 0.5 vs 9695.5/0.43%
* 3,900 Short Aug 72 call at 3 vs 9702.5/0.20%
* 5,000 Blue Sep 67/72 call over risk reversal at 0.5 vs 9698.5/0.42%
* 3,500 Sep 76/77 1x2 call sprd at 0.5
* +2,250 Short Sep 70 Straddle at 22
* 4,000 Sep 75/76 2X1 PUT SPRD at 5
UPDATE: Total 6,500 Short Sep 68 puts at 5 vs 9701/0.30%
* 9,000 Sep 83/85 put sprd, on screen
* 6,000 Short Aug 71/73 call sprd at 4 vs 9705/0.10%
* 5,000 Red Dec 77/85 call sprd at 4 vs 9694.5/0.21%
* 5,000 Red Dec 76/81 call sprd at 4.5
* 12,500 Sep 77/78 1x2 call sprd at 0
Block, 10:16:42ET
* 10,000 Short Sep/Green Sep 68/70 put sprd sprd for net 1.5
* 3,000 Blue Dec 66/73 call over risk reversal at 0.5 vs 9697/0.42%
* 2,500 Sep 75/76/77 call fly at 2.5 vs 9753/0.16%
* +3,000 Dec 71/72/73 put flys, 3.0
* -10,000 short Dec 71/73 put spds, 15.0 over 75 calls
* +18,000 Mar 80 call at 1 vs 9718.5/0.10%
* +15,000 Green Dec 77/80 call sprd at 1.5 vs 9699/0.05%, adds to 30k
screen/Block
* +5,000 Green Sep 68/70 put sprd at 6.5 vs 9694.5/0.10% vs.
* -5,000 Short Sep 68/70 put sprd at 5, 1.5 net, also blocked
* -5,000 Short Sep 68 puts at 5 vs 9701/0.30%
* +3,000 Green Dec 67/70 call sprd at 1.5 vs 9699/0.05%
* +10,000 Short Dec/Front Dec 75 calls at 0
* 3,500 Sep 72/73 put sprd at CAB
Block, 0745:10ET, adds to 25k on screen overnight
* 5,000 Green Dec 77/80 call spds, 1.5 vs. 96.985/0.05%
* 25,000 Green Dec 77/80 call sprd, on screen
Tsy options, Pit/screen:
* 3,400 wk5 TY 120 calls, 10/64 vs. 119-19/0.30%
* 2,000 wk1 FV 113.2 straddles, 30/64
* 2,000 TYQ 120/122 call spds, 23/64
* 1,000 TYN 120/120.5 strangles, 14/64
* -5,000 TYQ 120/120.5 1x2 call spds, 7/64
* -2,500 FVN 113.75/114 1x2 call spds, 0.0
* +2,500 TYN 120/120.5/121 1x3x2 call flys, 3/64 net vs. 119-26.5/0.10%
--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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