US TSYS: RISK-ON/RELIEF MOVE, TRADE WARS EASY TO WIN!

US TSY SUMMARY: Tsys weaker by the bell but choppy -- risk-on? Maybe -- equities

are certainly higher but maybe a bit over their skis ahead Wed's FOMC minutes

release. Initial risk on tone more debatable, more of a relief move after

conciliatory remarks from China pres Xi at Boao eco conf overnight. Rates

sensitive to trade headlines -- Tsy spiked briefly during London hours on Bbg

headline that US rejected "China offer to cut trade deficit by $50B".

- US$ Index lower (DXY -.229, 89.609); equities stronger/off highs (emini +37.5,

2656.5); gold higher (XAU +4.14, 1340.49); West Texas crude gapped higher (WTI

+2.35, 65.77) year high around 65.88 on March 23. Likely impetus a recent

Reuters headline: "SAUDI CROWN PRINCE SAYS IF CIRCUMSTANCES DEMAND IT SAUDI

ARABIA COULD BE PART OF INTERNATIONAL SYRIA RESPONSE".

- $30B 3Y note auction on the screws, yld 2.450% on Bid/Cover 2.85 vs. 2.94

previous, dealers took 40.88%, Indirects 47.55%, Directs 11.57%. Surprisingly

large corp/supra-sovereign issuance, the latter on $11B Saudi Arabia 3-way

($4.5b Saudi 7Y +140, $3b 12Y +175, $3.5b 31Y +210). Mixed, 2-way flow

- Late ylds: 2Y 2.307%, 3Y 2.441%, 5Y 2.621%, 7Y 2.736%, 10Y 2.797%, 30Y 3.017%

US TSY FUTURES CLOSE: After gravitating back to steady, long end comes under

renewed pressure after the bell. Choppy trade w/many sidelined ahead Wed's FOMC

minutes release. Curve update:

* 2s10s -1.276, 48.582 (51.172H/47.850L);

* 2s30s -2.432, 70.794 (74.279H/69.506L);

* 5s30s -1.502, 39.829 (41.620H/38.583L);

Current futures levels:

* Jun Ultra bonds down 6/32 at 159-05 (158-22L/159-22H)

* Jun 30-yr Bond futures down 7/32 at 145-27 (145-17L/146-08H)

* Jun 10-yr futures down 5/32 at 120-24 (120-22L/121-00H)

* Jun 5-yr futures down 3.25/32 at 114-06.75 (114-05L/114-11.75H)

* Jun 2-yr futures down 1.25/32 at 106-08.25 (106-07.5L/106-10H)

US EURODOLLAR FUTURES CLOSE: Lower across the strip by the bell, near mid-range

on moderate volume, not a strong risk-on tone w/equities near highs -- many

sidelined ahead Wed's FOMC minutes. Current White pack (Jun'18-Mar'19):

* Jun'18 -0.015 at 97.680

* Sep'18 -0.020 at 97.595

* Dec'18 -0.020 at 97.485

* Jun'19 -0.025 at 97.390

* Red pack (Jun'19-Mar'20) -0.020

* Green pack (Jun'20-Mar'21) -0.015-0.010

* Blue pack (Jun'21-Mar'21) -0.015-0.010

* Gold pack (Jun'22-Mar'22) -0.010-0.005

US DOLLAR LIBOR: Latest settles, 

* O/N -0.0012 to 1.7019% (-0.0012/wk) 

* 1 Month -0.0027 to 1.8944% (-0.0027/wk)

* 3 Month +0.0017 to 2.3390% (+0.0016/wk)

* 6 Month -0.0031 to 2.4675% (-0.0047/wk)

* 1 Year +0.0007 to 2.7042% (-0.0040/wk)

REPO REFERENCE RATES: (rate, volume)

* Secured Overnight Financing Rate (SOFR): steady 1.75%, $833B

* Broad General Collateral Rate (BGCR): steady at 1.70%, $341B

* Tri-Party General Collateral Rate (TGCR): steady 1.70%, $330B

US SWAPS: Spd curve steeper w/spds holding mixed after the bell, wings on

respective narrows/wides. Rather decent issuance across curve adding to move

($4.5B multi-tranche issuance from Bank of Montreal and Toyota Motor Cr 3- and

7Y, $11B Saudi Arabia between 7-, 12- and 31Y). Otherwise, mixed/two-way flow

earlier, flatteners in the intermediates.

PIPELINE: $11B Saudi Arabia 3-part just launched, waiting on Bnk of

Montreal, Toyota issuance to price

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

04/10 $4.5b #Saudi Arabia 7Y +140

04/10 $3b #Saudi Arabia 12Y +175

04/10 $3.5b #Saudi Arabia 31Y +210

04/10 $2.25B #Bank of Montreal $1.5B 3Y +70, $750M 3Y FRN L +46

04/10 $2.25B *Toyota Motor Credit $1B 3Y +52, $750M 3Y FRN +28, $500M 7Y +70

04/10 $2B *Ontario Teachers' Finance Trust 3Y +15

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

- Apr 11 06-Apr MBA Mortgage Applications (-3.3%, --) 0700ET 

- Apr 11 Mar CPI (0.2%, 0.0%) 0830ET 

- Apr 11 Mar CPI Ex Food and Energy (0.2%, 0.2%) 0830ET 

- Apr 11 Apr Atlanta Fed inflation (2.1%, --) 1000ET 

- Apr 11 06-Apr crude oil stocks ex. SPR w/w (-4.6m bbl, --) 1030ET 

- Apr 11 US Tsy $21B 10Y note auction, settle Apr 16 1300ET 

- Apr 11 Federal Reserve releases minutes from the March 20-21st FOMC 1400ET 

- Apr 11 Mar Treasury budget balance (-$215.2B, -$187.0B) 1400ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* +10,000 Dec 77 calls 0.5 over the Dec 72/73 put spds

* total +10,000 Jun 73/75/76 2x3x1 put flys, 2.25 net/wings over

* +5,000 short May 75/76 call spds, 1.0 vs. 97.32/0.10%

* -10,000 May 76/77 call spds 4.25 over the May 75/76 put spds vs. 97.685/0.16%

* +5,000 May 76 calls, 1.0

* +10,000 short Jul 68 puts, 1.5

* +10,000 Green Sep 70 puts, 11.5

* over -5,000 Green Sep 66 puts, 3.0

* -5,000 Blue Jun 75/77/80 call trees, 1.0

* -15,000 short Jun 75 calls w/Green Jun 73/75 call strip, 10.0total cr package

* +5,000 short Jun 72 puts, 7.0

* +6,000 short May 75/Blue May 73 call spds, conditional Red/Blue flattener,

0.25 db

* +15,000 Dec 71/75 put spds, 12.0 vs. 97.49/0.40%

* -5,000 short Jun 71 puts, 2.5

* -2,000 Sep 73/75/76 2x3x1 put flys, 0.5

* +5,000 short Apr/short May 73 put spds, 3.0 earlier

* +5,000 short Apr 73/75 call spds, 0.5

* -2,000 Blue Apr/Blue Jun 71 straddle spds, 17.5

* 2,000 Apr/May 77/78/80/81 call condor spds, 1.25

Tsy options, Pit/screen:

* Update, over +5,000 FVK 114.25 straddles, 23/64 pit/screen

* -2,300 TYM 120 puts, 20/64 vs. 120-23/0.30%

On screen

* +1,600 FVM 114/114.5 strangles, 32/64

* +1,700 FVM 113.5 puts, 6.5/32

* -4,000 FVM 114.75 calls, 11/64

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

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