US TSYS: RISK-ON TONE ACCELERATES LATE, S&PS SURGE

US TSY SUMMARY: Tsys weaker across the curve all session amid much better volume

(TYM>1.2M) w/London back from extended Easter holiday. Still, rather quiet/mixed

trade ahead Fri's March NFP (+195k est) and AHE (+0.3%) as well as Fed chair

Powell on economic outlook at 1330ET.

- Equities made several attempts to recover from Mon's sharp sell-off -- gapped

higher late (eminis +42.75 to 2617.75); gold weaker (XAU -10.42, 1330.83); West

Texas crude rebounding from Mon's drop (WTI +0.55, 63.55). 

- Limited react to second tier data: Redbook Mar store sales +0.4%; Fed speak

w/MN Fed pres Kashkari saying wasn't "clear how tight labor market really is."

- Decent corp issuance pick-up w/$6.05B General Mills Inc 8-tranche launch,

two-way hedging flow. Modest fast$, prop acct squaring in short to

intermediates. 

- Decent selling short end Eurodollar futures w/3M LIBOR +0.009 to 2.3208%; NY

Fed starts Secured Overnight Financing Rate (SOFR): 1.80%, $849B. Heavy option

volume targeting Jun'19 to price in more rate hikes.

- Late ylds: 2Y 2.286%, 3Y 2.413%, 5Y 2.606%, 7Y 2.729%, 10Y 2.786%, 30Y 3.022%

US TSY FUTURES CLOSE: Weaker across the board, at/near session lows with long

end sliding lower late as equities spike (emini +33.5, 2608.50). Curve update:

* 2s10s +1.603, 49.589 (50.033H/47.320L);

* 2s30s +1.996, 73.190 (74.003H/70.536L);

* 5s30s +0.065, 41.394 (42.642H/40.524L);

Current futures levels:

* Jun Ultra bonds down 1-15/32 at 159-02 (159-00L/160-24H)

* Jun 30-yr Bond futures down 1-0/32 at 145-24 (145-24L/146-28H)

* Jun 10-yr futures down 14.5/32 at 120-26 (120-25.5L/121-08.5H)

* Jun 5-yr futures down 9.25/32 at 114-09 (114-09L/114-18.25H)

* Jun 2-yr futures down 3.25/32 at 106-08.75 (106-08.25L/106-12H)

US EURODOLLAR FUTURES CLOSE: Weaker across the strip, session lows with

Reds-Blues revisiting midday lows late. Moderate selling in White. Current White

pack (Jun'18-Mar'19):

* Jun'18 -0.025 at 97.685

* Sep'18 -0.025 at 97.605

* Dec'18 -0.035 at 97.495

* Jun'19 -0.045 at 97.400

* Red pack (Jun'19-Mar'20) -0.050-0.055

* Green pack (Jun'20-Mar'21) -0.055

* Blue pack (Jun'21-Mar'21) -0.0500-0.055

* Gold pack (Jun'22-Mar'22) -0.050

US DOLLAR LIBOR: Latest settles, 

* O/N +0.0025 to 1.6994% (-0.0006 last wk) 

* 1 Month -0.0056 to 1.8775% (+0.0081 last wk)

* 3 Month +0.0090 to 2.3208% (+0.0203 last wk)

* 6 Month +0.0074 to 2.4598% (+0.0027 last wk)

* 1 Year +0.0074 to 2.6700% (-0.0094 last wk)

REPO REFERENCE RATES, (rate, volume)

* Secured Overnight Financing Rate (SOFR): 1.80%, $849B

* Broad General Collateral Rate (BGCR): 1.77%, $361B

* Tri-Party General Collateral Rate (TGCR): 1.77%, $329B

US SWAPS: Spds mixed by the bell holding relatively narrow range, short end off

earlier wides on mixed trades

* $195.4k 2Y-3Y-5Y Fly, paying the belly

* $195.4k 3Y-4Y-5Y Fly, paying the belly

* $295.8k 2Y-9Y-10Y Fly, receiving the belly

* $250mln receiver of USD 2Y at 2.58375%

* $170mln+ receiver of USD 10Y at 2.7951%

* $147.9k DV01 9Y-10Y STEEPENER

PIPELINE: $6.05B General Mills Inc launched, Union Electric Co priced

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

04/03 $Benchmark General Mills Inc., potential 8-tranche issuance:

      $600M 3Y Fxd +80, $850M 3Y FRN +54

      $850M Long 5Y Fxd +115, $400M 5Y FRN +101

      $800M 7Y +130

      $1.4B 10Y +145

      $500M 20Y +155

      $650M 30Y +170

04/03 $425M *Union Electric Co WNG 30Y FMB IPT +100

04/03 $Benchmark Charter Communications 20Y +270a, 30Y +290a

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

- Apr 04 30-Mar MBA Mortgage Applications (4.8%, --) 0700ET

- Apr 04 Mar ADP private payrolls (235k , --) 0815ET

- Apr 04 Mar Markit Services Index (final) (54.1, --) 0945ET

- Apr 04 StL Fed Pres Bullard, Ark Bnk Assn & Ark Bnk Dpt's Day w/Comm Little

Rock, Q&A. 0945ET

- Apr 04 Mar ISM Non-manufacturing Index (59.5, 59.0) 1000ET

- Apr 04 Feb factory new orders (-1.4%, 1.6%) 1000ET

- Apr 04 Feb factory orders ex transport (0.4%, 1.3%) 1000ET

- Apr 04 Apr help-wanted online ratio (1.25, --) 1000ET

- Apr 04 30-Mar crude oil stocks ex. SPR w/w (1.6m bbl, --) 1030ET

- Apr 04 Clev Fed Pres Mester keynote speech, Central State Univ Leaders, Exec,

Entrepreneurs, and Directors Program Wilberforce, Ohio, Q&A. 1100ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* +4,000 Dec 70/72 put spds, 3.25/legs

* -3,000 Mar 68/70/71/73 3x4x3x4 put condors, 35.5

* +2,000 Blue Apr 71 straddles, 11.5

* +10,000 Jun 76/77 1x2 call spds, 1.0

* -10,000 Green Jun 70/71 put spds, 4.5 vs. 97.185/0.14%

* 13,500 Red Sep'19 70 puts, 14.0 vs. 97.279/0. vs

* 6,750 Red Mar20 66/67 put spd, 28.0 vs. 97.20

* +5,000 Sep 72/73 put spds, 1.5 vs. 97.58/0.05%

* 15,000 short Apr 75 calls, 1.0 vs. 97.34/0.10%

* 8,000 Dec 70/71 put spds, 1.0

* -7,500 Red Sep19 72 straddles, 51.0

conditional curve steepener also targeting June'19 to price in more hikes

* +50,000 Jun 78/81 1x2 call spds 0.25 over the short Jun 78 calls

* total +50,000 short Jun 70 puts, 1.5 -- ongoing position build, hedging more

rate hikes to be reflected in mid-2019. Note, open interest between the short

Jun 70 and 71 puts is near 1M (965k)!

* -20,000 Green Jun 73 calls, 7.0 vs. 97.20/0.30%

* 7,500 Sep 72/73/75 put flys, 2.0

* -10,000 Green Jun 75 calls, 3.5 vs. 97.165/0.18%

Block, 1023:26ET

* 10,000 short Jun 70 puts, 1.5 vs. 97.33/0.10%

Block, 0932:00ET

* +10,000 Red Sep'19 72 puts, 24.5 vs. 97.275/0.48%

* -10,000 Red Mar'20 66 puts, 12.0 vs. 97.205/0.24%

* 4,000 Dec 76/78 call spds, 5.5 vs. 97.505/0.20%

* +10,000 Green Jun 76 calls, 2.5 vs. 97.185/0.10%

* 5,000 Jun 78/80 put spds, 11.5

* 3,000 Jun 77 calls, 4.5

* 20,000 Green Dec 70/75 put over risk reversals, 0.5 vs. 97.22/0.75%

* 19,570 Green Dec 68/75 risk reversals on screen

* +10,550 Sep 72/73 put spds, 2.0-2.5

* +9,000 Dec 71/72 put spds 2.0

* +5,500 Mar 68/71 put spds 4.5

* 2,500 Mar 70/72 put spds vs. Mar 76 calls

Tsy options, Pit/screen:

* -5,000 TYK 121.5 calls, 15/64

* -3,000 FVK 113.75/114.25 strangles, 27- to 25.5/64

* +2,800 FVM 113.75/114 4x2 put spds w/FVM 115.25 calls

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

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