US TSYS: STRONG DATA FUELS CLIMB IN EQUITIES

US TSY SUMMARY: Tsy trading sharply lower near the bottom of a large range;

strong volume (TYH 1.98M); Curves flatter. Data today came in higher than

expected including Nonfarm Payrolls, Hourly earnings, and Unemployment rate

which brought Tsy to new session lows.  

-Fed Chair Jerome Powell spoke with formers Yellen and Bernanke at the AEM.

Powell stated, "With the muted inflation readings that have been coming in, we

will be patient and see how the economy evolves". Powell also stated, "MARKETS

EXPRESSING CONCERNS OVER GLOBAL GROWTH, TRADE". Tsy fell to new session lows

during the comments.

-Trump spoke late in the session with a focus on the wall "*TRUMP SAYS

GOVERNMENT WON'T REOPEN UNTIL BORDER ISSUE SOLVED-bbg"

-Other notable speakers today include Feds Mester and Larry Kudlow

-Equities higher (emini +85.25, 2533.00); WTI up despite paring most gains on

EIA data (WTI +1.04, 48.13), DXY lower (-.104, 96.201); $/Eur +0.0003 at 1.1397,

$/Yen +0.81 108.48; Gold (XAU -9.66, 1284.66) -Tsy cash/ylds: 2Y 100-0.25

(2.494%), 5Y 100-19.75 (2.491%), 10Y 103-31.5 (2.661%), 30Y 107-28.5 (2.973%).

US TSY FUTURES CLOSE: Tsy trading sharply lower near the bottom of a wide range;

strong volume (TYH 1.93M); Curves flatter; update:

* 2s10s -0.169, 17.117 (14.869L/18.614H);

* 2s30s -3.461, 48.734 (47.009L/51.845H);

* 5s30s -5.277, 49.020 (47.448L/53.743H);

Current futures levels:

* Mar Ultra bonds down -2-05/32 at 161-29 (161-08L/164-14H)

* Mar 30-yr Bond futures down -1-24/32 at 146-29 (146-19L/148-27H)

* Mar 10-yr futures down 28/32 at 122-09 (122-5.5L/123-7.5H)

* Mar 5-yr futures down 17.5/32 at 114-24.25 (114-22L/115-11.5H)

* Mar 2-yr futures down 6.5/32 at 106-5.25 (106-3.75L/106-12.5H)

US EURODOLLAR FUTURES CLOSE: Trading sharply near the bottom of a wide range;

strong volume. Current White pack(Mar'19-Dec'19):

* Mar'19 -0.045 at 97.295

* Jun'19 -0.080 at 97.315

* Sep'19 -0.105 at 97.360

* Dec'19 -0.110 at 97.380

* Red pack (Mar'19-Dec'20) -0.140-0.120

* Green pack (Mar'20-Dec'21) -0.150-0.145

* Blue pack (Mar'21-Dec'21) -0.150

* Gold pack (Mar'22-Dec'22) -0.150-0.135 

     US DOLLAR LIBOR: Latest settles,

* O/N +0.0021 to 2.3940% (+0.0016/wk)

* 1 Month +0.0078 to 2.5205% (+0.0006/wk)

* 3 Month +0.0089 to 2.8039% (+0.0069/wk)

* 6 Month -0.0032 to 2.8557% (-0.0174/wk)

* 1 Year at 2.9649%

     US TSYS: *** /REPO REFERENCE RATES: (rate, volume)

* Secured Overnight Financing Rate (SOFR): 2.70% vs. 3.15% prior, $1063B

* Broad General Collateral Rate (BGCR): 2.70% vs. 3.10% prior, $444B

* Tri-Party General Collateral Rate (TGCR): 2.70% vs. 3.10% prior, $429B

PIPELINE: *** LAUNCH: John Deere Capital Debt Offering in 3-Parts

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

1/04  $1.5b #John Deere Capital $500m 1.5Y FRN 3mL +42, $600m 3Y +77,

      $400m 5Y +97

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

07-Jan 1000 Nov factory new orders (-2.1%, --)

07-Jan 1000 Nov factory orders ex transport (0.3%, --)

07-Jan 1000 Dec ISM Non-manufacturing Index (60.7, --)

07-Jan 1000 Dec ETI

07-Jan 1240 Atl Fed Pres Bostic, econ-outlook/mon-pol, Rotary Club of Atl, Q&A.

07-Jan 1500 Dec Treasury STRIPS Holdings

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/Screen: 

* 10,000 Sep 72/75 1x2 call sprd as 1.5

* +20,000 Jun 70/71 put spds, 1.5 to 1.7

* 20,000 Short Feb 73/75 call sprd vs 73 puts from 3.5 to 4

* 10,000 Green Mar 66/68 put sprd at CAB 

"* 10,000 Short Feb 73 calls at 22.5

* 12,500 Short Feb 76 calls at 8

* 20,000 Short Feb 73 Puts at 3.5, BLOCKED"

* -20,000 Jun 70/71 put spds at 1.75

* -8,000 Mar 71/72/75 call tree at 8.75

* Total -57,000 Mar 70/71 put sprd at 0.75 

* 25,000 Sep 73/75 put sprd at 8 vs 9734/0.10% 

* -15,000 Short Jan 75 puts at 5

* 10,000 Apr/Jun 72 Straddle Sprd at 4.25 BLOCK

* 5,000 Mar 71/72 Strangle at 8

* 10,000 Sep 76 calls at 6.5 vs 9736/0.25%

* 12,500 Dec 70/72 put sprd at 8.5 vs 9736.5/0.10% BLOCK

* 7,500 Dec 67/68 put sprd at 1.5 vs 9738.5/0.05%

* 6,000 Dec 77/80 call sprd at 4 vs 9739.5/0.10%

TSY OPTIONS:

* >19,000 TYG 123.5 calls, 14/64

* >+60,000 TYG 122/123 call sprd at 26 vs 08/0.34%, on screen

* 5,000 TYG 120.75/124 puts over risk reversal at 0 vs 122-6.5/0.16%

* 3,000 TYH 122/123 strangles, 1-1/64

* 2,000 wk2 FV 115 straddles, 29/64

* 1,000 FVG 113.5/114.5/115 put flys, 6/64

* 1,500 TYG 121.5/122.5 3x2 put spds, 9/64 vs. 122-19

* 2,400 TYH 122/123 call spds, 29/64

* 2,000 TYG 1215./122.5 call spds, 40/64

* 1,300 TYH 125/127 1x2 call spds, 0.0

* 7,400 FVH 114.25 puts, 12/64 on screen earlier

* Total -25,000 TYG 122/123.5 call sprd at 31

--MNI Chicago Bureau; +1 630-698-0154; email: ryan.martin@marketnews.com

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