US TSYS: RATES LITTLE WEAKER AS EQ'S CLIMB TO NEW RECORD HIGHS

US TSY SUMMARY: Following early morning chop w/Tsys making session lows after

the bell, futures finish mildly weaker, near middle session range after holding

narrow range in Jan FOMC minutes. 

- While the late Jan minutes cautioned coronavirus needs "close watching",

current policy "likely to remain appropriate for a time". "Maintaining the

current policy stance for a time could be helpful in supporting U.S. economic

activity and employment in the face of global developments that have been

weighing on spending decisions."

- Equities continue to power higher, S&Ps making new highs (3391.75); sources

citing jump in USD/Yen (111.58 late) as supportive for equities. But as long as

the ECB funds co's at zero rates to make acquisitions, sources pointed out,

equities unlikely to sell off.

- Session flow included central bank selling in short end, decent deal-tied

hedging (two-day total >$30B high-grade debt issued). Surge in Mar/Jun Tsy

rolling. The 2-Yr yield is up 1bps at 1.4219%, 5-Yr is up 0.7bps at 1.4045%,

10-Yr is up 0.3bps at 1.5644%, and 30-Yr is down 0.1bps at 2.0097%.

TECHNICALS:

US 10YR FUTURE TECHS: (H0) Round Trip 

*RES 4: 132-02+ High Oct 3 and Oct 7 and key resistance

*RES 3: 131-29 Feb 3 high

*RES 2: 131-20+ High Feb 4

*RES 1: 131-12+/16+ High Feb 18 / 76.4% of the Feb 3 - Feb 6 decline 

*PRICE: 131-04 @ 16:07 GMT, Feb 19

*SUP 1: 130-19+ Low Feb 12

*SUP 2: 130-07   Low Jan 29 and key near-term support

*SUP 3: 129-30+ 50-day EMA

*SUP 4: 129-17+ Low Jan 23 

Having rallied up to 131-12+, 10yr futures faded into the close Tuesday and

these losses extended into the Wednesday session. This sees the current bearish

outlook hold, and bulls need to top 131-16+ in order to open the early February

highs and repair the outlook. To the downside, scope is seen for a move towards

129-30+, an area of support highlighted by the 50-day EMA.

AUSSIE 10-YR TECHS: (H0) Horizontal

*RES 3: 99.1700 - High Aug 16

*RES 2: 99.1550 - High Oct 9

*RES 1: 99.1200 - High Feb 4

*PRICE: 98.9850 @ 16:24 GMT, Feb 19

*SUP 1: 98.7150 - Low Jan 14 and key near-term support 

*SUP 2: 98.5900 - Low Jan 3 

*SUP 3: 98.5700 - Low Jan 2 and primary support

Aussie 10yr futures flatlined Wednesday, maintaining the gap with near-term

resistance at 99.12. This keeps the technical picture broadly unchanged and

slightly negative, but a recovery above the early February highs will change

this. To the downside, the initial focus is on 98.7150, Jan 14 low where a break

is required to signal a fresh round of stronger bearish pressure. 98.8600 is a

key downside risk parameter.

JGB TECHS: (H0): Fading Fast

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

*RES 2: 153.13 - 100-dma

*RES 1: 153.13 - High Jan 31

*PRICE: 152.65 @ 16:27 GMT, Feb 19

*SUP 1: 152.33 - 50-dma

*SUP 2: 151.62 - Contract lows, Dec 20

*SUP 3: 151.11 - 76.4% retracement of August 2018 - September 2019 Rally

JGBs pulled lower Wednesday after the pretty erratic rally earlier in the week.

This negates any of the bullish signals that emerged, with dmas still marking

both the upside and downside targets. The 100-dma sits at 153.13, which acts as

a bull trigger going forward. Nonetheless, the risk of a pullback still looms

large at present levels. For bears to recapture any momentum, a close below the

50-dma is needed, opening 151.62 and the 151.11 mark beyond.

TSY FUTURES CLOSE: Following early morning chop, futures finishing mildly

weaker, near middle session range after holding narrow range in Jan FOMC

minutes. Update:

* 3M10Y  +0.045, -1.246 (L: -3.375 / H: 0.627)

* 2Y10Y  -0.481, 14.053 (L: 13.409 / H: 15.109)

* 2Y30Y  -0.893, 58.652 (L: 57.654 / H: 59.862)

* 5Y30Y  -0.728, 60.431 (L: 59.746 / H: 61.278); Current futures levels:

* Mar 2-Yr futures down 1/32 at 107-31.125 (L: 107-30.25 / H: 108-00)

* Mar 5-Yr futures down 2.75/32 at 119-27.75 (L: 119-25.25 / H: 119-31)

* Mar 10-Yr futures down 3.5/32 at 131-3 (L: 130-30 / H: 131-08)

* Mar 30-Yr futures down 4/32 at 163-1 (L: 162-18 / H: 163-13)

* Mar Ultra futures down 6/32 at 194-0 (L: 193-06 / H: 194-24)

US TSY FUTURES: Late Mar/Jun futures volume update (10Y and 10Y-Ultra still

lagging). First notice next week Friday, February 28. March futures don't expire

until mid-late March (10s, 30s and Ultras on 3/20, 2s & 5s 3/31). Session volume

and % complete update:

* TUH/TUM appr 148,800 from -6.0 to -5.62, -5.88 last; 16% complete

* FVH/FVM appr 248,800 from -13.0 to -12.25, -12.5 last; 14% complete

* TYH/TYM appr 88,600 from 3.5 to 4.0, 3.75 last; 8% complete 

* UXYH/UXYM appr 16,800 from 8.75 to 9.25, 8.75 last; 3% complete

* USH/USM appr 58,900 from 30.5 to 30.75, 30.25 last; 14% complete

* WNH/WNM appr 135,500 from -25.5 to -23.5, -23.75 last; 17% complete

US EURODLR FUTURES CLOSE: Moderately weaker after the bell, mid- to lower half

narrow session range. Current White pack (Mar'20-Dec'20):

* Mar 20 -0.015 at 98.333

* Jun 20 -0.025 at 98.450

* Sep 20 -0.025 at 98.535

* Dec 20 -0.025 at 98.575

* Red Pack (Mar 21-Dec 21) -0.03 to -0.025

* Green Pack (Mar 22-Dec 22) -0.025 to -0.02

* Blue Pack (Mar 23-Dec 23) -0.02 to -0.015

* Gold Pack (Mar 24-Dec 24) -0.015 to -0.01

US DOLLAR LIBOR: Latest settles

* O/N +0.0135 at 1.5769% (+0.0008/week)

* 1 Month -0.0076 to 1.6394% (-0.0188/wk)

* 3 Month +0.0014 to 1.6960% (+0.0043/wk)

* 6 Month -0.0161 to 1.6987% (-0.0113/wk)

* 1 Year -0.0031 to 1.7688% (-0.0295/wk)

US SWAPS: Spds running mildly wider after the bell, off top end of range as

deal-tied hedges start coming off, spec tied receiver unwinds on the mild

risk-on move in rates. Latest spd levels:

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

Wed 1500   +0.69/+2.81    +0.50/-0.62   +0.12/-5.75    +0.25/-33.50

1330       +0.81/+2.94    +0.38/-0.75   +0.31/-5.56    +0.25/-33.50

1130       +0.56/+2.69    +0.50/-0.62   +0.19/-5.69    +0.38/-33.38

0930       +0.56/+2.69    +0.19/-0.94   +0.12/-5.75    +0.38/-33.38

Wed Open   +0.62/+2.75    +0.12/-1.00   -0.12/-6.00    +0.25/-33.50

Tue 1500   -1.50/+2.25    -0.25/-1.00   -0.69/-6.19    -1.00/-33.75

Tuesday recap: Spds running tighter across the board, late session lows/wings

leading on back of over $18B swappable corporate supply. Spec rate receiving in

2s-10s earlier.

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

* Daily Effective Fed Funds Rate: 1.58%, volume: $69B

* Daily Overnight Bank Funding Rate: 1.58%, volume: $185B

US TSYS: REPO REFERENCE RATES:

* Secured Overnight Financing Rate (SOFR): 1.60%, $1.163T

* Broad General Collateral Rate (BGCR): 1.58%, $440B

* Tri-Party General Collateral Rate (TGCR): 1.58%, $426B

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

20-Feb 0830 15-Feb jobless claims (205k, 210k)

20-Feb 0830 Feb Philadelphia Fed Mfg Index (17, 11)

20-Feb 0830 Vice Chair Clarida CNBC interview

20-Feb 1030 14-Feb natural gas stocks w/w

20-Feb 1100 14-Feb crude oil stocks ex. SPR w/w

20-Feb 1320 Rich Fed Pres Barkin, Harvard Kennedy School

20-Feb 1630 19-Feb Fed weekly securities holdings

PIPELINE: $5.3B Otis Worldwide 6-part jumbo launched

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

02/19 $5.3B #Otis Worldwide Corp jumbo: $500M 3NC1 +45, $1.3B 5Y +65, $500M 7Y

+80, $1.5B 10Y +100, $750M 20Y +110, $750M 30Y +135

02/19 $1.5B #JP Morgan perp NC5 4.0%

02/19 $1.25B #BP Capital Markets AM 30Y +107

02/19 $1B #Tennessee Gas Pipeline 10Y +135

02/19 $1B #Halliburton 10Y +135

02/19 $750M *KLA Corp 30Y +130

02/19 $600M #Omnicon 10Y +92

02/19 $300M #FNB Corp 3Y +83

On tap for Thursday:

02/20 $1B Council Of Europe Development Bank (COE) WNG 5Y +9a

Eurodollar/Tsy options 

Eurodollar options:

* -10,000 Jun 85 straddles 17.0 over Jun 87 calls

* +5,000 Jun 85/86/87 call flys, 1.0

* +10,000 Red Mar'21 78/80 put spds, 0.5

* +15,000 Dec 80/81 put spds, 0.75

* 6,800 Blue Mar 90 calls, 1.0 on screen, total volume 12,395 earlier

* RFQ's earlier: +15,000 Jun 87/88 call strip, 5.0 looking for more offers

* Update total +50,000 Dec 78/80/81 put flys, 0.5

* +40,000 Dec 78/80/81 put flys, 0.5

* +10,000 Dec 82 puts, 3.5

* +10,000 short Jul 91 calls, 5.5 vs. 98.71/0.25%

* +5,000 Jun 86/90 1x3 call spds, 2.0

* 4,000 Sep 82/83 2x1 put spds, 2.75

* Jun 88 calls trading 2.0 again, modest buyer after earlier size, paper

checking Jun 87/88 call strip, 5.0 offer

* +10,000 Jun 85/86/88/95 broken call condors, 1.5

* +25,000 Jun 86/87 call spds, 2.25

* +5,000 Jun 85/87 call spds, 1.0

* +20,000 Jun 87 calls, 3.0

* over 20,000 Jun 88 calls trade cdown to 1.75

* 5,000 Jun 87/88 call spds 0.5 over Jun 82 puts

* near 10,000 Sep 87/92/97 call flys, 5.5

Early vol sales

* near -16,000 Mar 87 straddles, 17.0 (went out 17.0 bid Tue)

* +10,000 Dec 82/83 put spds, 5.0

- Jun 88 calls trade continues

* Outright at 2.0 helped push volume over 110k -- after 45k Jun 86/88 call spds

Block, 0656:24ET, ongoing buyer, another +20k on screen, adds to +100k pit/Block

on Tues

* +5,000 Jun 86/88 call spds 3.5 adds to prior blocks, 26,930 total

Tsy options:

Surge in screen volume continues

* 17,500 USK 146 puts, 2/64

* 23,000 TUJ 107.5 puts, 0.5/64

* 10,000 TYJ 137 calls, 1/64

* 52,400 FVJ 117.75 puts on screen just now, 1/64

* hear over +/-22,000 TYH 130.5 conversions, 0.0 on screen squaring up ahead

Fri's Mar exp

Ongoing sub-cab interest in Jun 5Y way-OTM puts

* over 45,000 FVM 113.25 puts, cab-7, after Tue's buying of appr 91k FVM 113

puts cab 7 and 150k FVM 114.75 puts, 1/64

Salient overnight trade, Blocks

* Block, 10,000  USJ 157/159 2x1 put spds, 9/64

* Block, 20,000 TYH 130.5 puts, 2/64

* 16,000 TYH 130.25 puts, 1/64

* 2,0000 TYH 130.75/131 put spds, 5/64

* 2,400 FVH 120/121 call spd

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

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