US TSYS: RISK-ON, RATES DISCOUNT IMPORT TARIFF INTENT

US TSY SUMMARY: Rates traded weaker, but off second half lows, strong risk-on

move with equities surging late (emini +33.0, 2723.25). Fear of metals import

tariff blowback, US Pres Trump not backing down on intentions, possibly doubling

down amid talk of taxes on auto imports didn't have same effect as late last wk.

Gold weaker (XAU 0-3.39, 1319.36); Crude stronger (WTI +1.40, 62.65)

* Concerted risk-on move extending ranges in second half as Tsy futures extended

session lows, long end leading move; US$ index +.135 at 90.070 while Yen gains

vs. USD 106.206 vs. early low of 105.35. 

* Flow included fast$ and prop selling 5s and 10s, bank and real$ sellers 10s

and 30s, modest deal-tied flow in front end, early paying in 2s and 3s followed

by receiving in 5s and 10s, light flattener unwinds in 2s10s and 5s 30s, FX-tied

sales in intermediates-long end.

* Eurodollar futures weaker by the bell, at/near session lows w/Blue-Golds

underperforming. Short end under heavy sell pressure following jump in 3M LIBOR

this morning (+0.0097 to 2.0349%, +0.0690 last wk).

Late ylds: 2Y 2.242%, 3Y 2.404%, 5Y 2.645%, 7Y 2.807%, 10Y 2.881%, 30Y 3.152%

US TSY FUTURES: Lower across the curve, well off second half lows w/risk off

move scaling back late even as equities remain strong (emini +36.25, 2726.5).

Latest curve update:

* 2s10s +1.814, 63.858 (64.590H/59.678L);

* 2s30s +1.488, 90.995 (92.376H/87.329L);

* 5s30s -0.280, 50.705 (52.754H/50.336L);

Current futures levels:

* Jun Ultra bonds down 21/32 at 155-07 (154-23L/156-27H)

* Jun 30-yr Bond futures down 15/32 at 142-31 (142-21L/144-05H)

* Jun 10-yr futures down 6.5/32 at 119-31.5 (119-28.5L/120-20H)

* Jun 5-yr futures down 3.75/32 at 113-31.25 (113-29.75L/114-11H)

* Jun 2-yr futures down .75/32 at 106-08.5 (106-08L/106-11.25H)

US EURODOLLAR FUTURES CLOSE: Trading weaker by the bell, at/near session lows

w/Blue-Golds underperforming. Short end under heavy sell pressure following jump

in 3M LIBOR this morning (+0.0097 to 2.0349%, +0.0690 last wk). Current White

pack (Mar'18-Dec'18):

* Mar'18 -0.032 at 97.907

* Jun'18 -0.025 at 97.770

* Sep'18 -0.020 at 97.655

* Dec'18 -0.020 at 97.510

* Red pack (Mar'19-Dec'19) -0.020-0.025

* Green pack (Mar'20-Dec'20) -0.025-0.035

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

* Gold pack (Mar'22-Dec'22) -0.030-0.040

US DOLLAR LIBOR: Latest settles, 

* O/N +0.0000 to 1.4475 (-0.0006 last wk)

* 1 Month +0.0112 to 1.7017% (+0.0593 last wk)

* 3 Month +0.0097 to 2.0349% (+0.0690 last wk)

* 6 Month +0.0009 to 2.2293% (+0.0465 last wk)

US SWAPS: Spds running mixed, spd curve flatter w/wings on corresponding

extremes. Earlier flow included real$ receiver 5s, fast$ paying belly earlier;

recent $186.4k 3Y-4Y-5Y Fly, paying the belly, $160M payer of USD 5Y at 2.705%.

By midday, paying in 2s and 3s followed by receiving in 5s and 10s. Latest

spread levels:

* 2Y  +1.44/27.00

* 5Y  +0.06/9.88

* 10Y -0.31/0.75

* 30Y -0.44/-18.75

PIPELINE: $1B TVA 2Y Launched, $1B KDB 3Y FRN Priced

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

03/05 $1B *Korea Development Bank (KDB) $500M 3Y FRN L+55, 5Y fix +85

03/05 $1B #Tennessee Valley Auth, 2Y WNG +11

03/05 $Benchmark OKB (Oesterreichische Kontrollbank AG) 5Y +17a

-

Potential upcoming issuance in the near term:

Chatter, United Overseas Bank (UOB)

Chatter, Korea Resources (KORESC)

Chatter, Aegon NV (AEGON)

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

- Mar 06 Dallas Fed Pres Kaplan CNBC interview 0800ET

- Mar 06 03-Mar Redbook retail sales m/m (-0.6%, --) 0855ET

- Mar 06 Jan factory new orders (1.7%, -1.3%) 1000ET

- Mar 06 Jan factory orders ex transport (0.7%, --) 1000ET

- Mar 06 Mar IBD/TIPP Optimism Index (56.7, --) 1000ET

- Mar 06 US Tsy 1M bill auction, 1130ET

- Mar 06 Feb Treasury STRIPS Holdings 1500ET

- Mar 06 Fed Gov Brainard on economic and mon/pol outlook at "Money Marketeers

Forum" in New York City, with audience Q&A. 1900ET

- Mar 06 Dallas Fed Pres Kaplan participation moderated Q&A at CERA Wk in

Houston, with audience and media Q&A. 2030ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* +5,000 long Green Jun 60/71 3x1 put spds, 20.0

* 4,000 short Apr 71/72 put spds, 3.0

* 4,000 short Apr 73/75 call spds, 3.0 vs. 97.225/0.35%

* +5,000 Blue Mar 73/76 call spds, 0.5

* +25,000 Red Dec 60/63 2x1 put spds, 1.75 legged

* +10,000 short Apr 75/78 call strip 1.5 over Blue Apr 73 calls vs. 97.355/0.10%

* +5,000 short Apr 73/75/76 call flys, 2.0

* -4,000 Green Mar 71/72 put over risk reversals, 0.5/0.70%

* +2,500 Green Jun 70/73 call over risk reversals, 1.0 vs. 97.195/0.62%

* +20,000 Aug 72/73 2x1 put spds, cab

* +7,000 Green Sep 77/78 call spds, 1.0

* -5,000 Red Jun'19 73 straddles, 44.0

* +3,500 Sep 76/77/78 put trees, 1.5

* -2,000 short Apr 73/75/76 call flys,

* 2,000 Red Dec'19 63/67/72 put flys, screen

* +3,000 Mar 78/80 strangles, 1.25

* Update, total +80,000 Red Mar'19 67 puts, 1.0 vs. 97.435 to -.46

* 7,000 Green Sep 77/78 call spds, 1.5

* Update, total +66,000 Red Mar'19 67 puts, 1.0 vs. 97.45 to -.46

* Update, total +27,000 Dec 71 puts, 1.5 vs. 97.53/0.08

Block post, 0933:31ET

* -10,000 Green Mar 71/72 put spds, 5.5 vs. 97.215/0.28%

* -20,000 short Jun 71/73 put spds 4.5 over short Jun 75/77 call spds vs.

97.37/0.48%

* Update, total +27,000 Dec 71 puts, 1.5 vs. 97.53/0.08

* +5,000 Dec 71/72 put spds, 2.0 vs. 97.52/0.10%

* +5,000 Blue Apr 75 calls, 2.0

* -5,000 Green Mar 71 puts, 3.0

* -10,000 Jun 77/80 2x1 put spds, 13.5 vs. 97.77/0.10%

* Update,total +42,000 Red Mar'19 67 puts, 1.0 vs. 97.41/0.05%

* +5,000 Red Mar'19 67 puts, 1.0 vs. 97.41/0.05%

Block post, 0641:38ET 

* 5,000 Red Mar'19 70 puts, 2.5 vs. 97.47/0.14%

Tsy options, Pit/screen:

* 1,600 TYM 114 puts, 3/64 vs. 119-23.5

* 1,000 TYJ 121.5/122.5 call spds, 4/64

* 5,000 TUK 105.5/105.7/106 put flys 1.5/64 vs. 106-11.5

* Update, over 5,000 TYM 118.5/122.5 call over risk reversals, 1/64

* +6,900 TYJ 119.5/120 put spds, 9- to 10/64 vs. 120-13.5/0.14%, adds to +30k

Block

* +5,000 USJ 138/140/142 put flys, 16- to 17/64

* 1,650 FVJ 113.7/114.5 call over risk reversals, 3/64 vs. 114-06

Latest BLOCK, 0827:32

* 30,000 TYJ 119.5/120 put spds, 10/64 vs. 120-13.5/0.14%

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

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