US TSYS: Take My Oil, Please!

US TSY SUMMARY: Would have been a rather quiet start to the week, risk-off tone

with Tsys regaining some ground (on light volumes, TYM<685k) after Fri's sharp

sale as equities sold off (ESM0 extending session lows late -63.5 at 2806.5).

- But then West Texas crude fell apart: making history by trading negative for

the first time: May WTI -37.63 settle, Low -40.32. -20.30 last. Incidentally,

the daily price limit for the May WTI futures was 0.01 -- why some screens stuck

there. Otherwise electronic trade close at 1700ET. Reminder: The contract

expires tomorrow and soaring storage costs continue to roil physical delivery.

- Some questions re: negative strike options ... nothing listed/priced yet: the

CME said "would consider" negative pricing IF/ONCE WTI traded between $8-$11bbl

just happened ... not going to add strikes on the fly.

- Modest two-way deal-tied hedging on some $3.65B issuance, total for week

estimated >$40B.

- Decent option volume w/buyers of low delta wings in 2s-10s. The 2-Yr yield is

up 0.2bps at 0.2037%, 5-Yr is down 1bps at 0.35%, 10-Yr is down 2.5bps at

0.6163%, and 30-Yr is down 3.5bps at 1.2255%.

TECHNICALS:

US 10YR FUTURE TECHS: (M0) Bullish Outlook Remains In Place  

*RES 4: 141-26   0.764 projection of Feb 2 - Mar 9 rally from Mar 19 low 

*RES 3: 140-24   High Mar 9 and key contract high

*RES 2: 140-00   Round number resistance

*RES 1: 139-14+ High Apr 2 and bull trigger

*PRICE: 139-03+ @ 16:19 BST, Apr 20

*SUP 1: 137-16   Low Apr 7 and key near-term support

*SUP 2: 136-29+ Low Mar 24 

*SUP 3: 136-02   50-day EMA

*SUP 4: 134-22   Low Mar 20

10yr futures are trading below last week's high but retain a bullish outlook. On

Apr 7, prices found support at 137-16. This was also the area where the 20-day

EMA intersected on Apr 7 and, the subsequent recovery is a bullish development

reinforcing the underlying positive outlook. Key S/T support is 137-16, Apr 7

low. While it holds, the focus is on 140-00 and the contract high of 140-24 from

Mar 9. The bull trigger is 139-14+, Apr 2 high. 

     AUSSIE 3-YR TECHS: (M0) New Normal

*RES 3: 100.000 - Handle Psychological Resistance

*RES 3: 99.951 - 123.6% Fib Projection

*RES 1: 99.780 - High Apr 01

*PRICE: 99.735 @ 16:20 BST Apr 20

*SUP 1: 99.440 - Low Mar 16

*SUP 2: 99.300 - Recent low (cont)

*SUP 3: 99.225 - Low Feb 6 and 13 (cont)

Aussie bond markets hold close to alltime highs following the RBA's venture into

bond markets which is clearly still propping up prices. The chart has now begun

to look overbought and a period of consolidation is now the most likely outcome.

A break of the Mar 16 low would trigger deeper short-term losses and open the

99.300 level, a recent low of the continuation chart.

     AUSSIE 10-YR TECHS: (M0) Finds Some Upside Momentum

*RES 3: 99.5598 - 1.236 projection of the Jan 2 -Feb 4 rally from Feb 13 low 

*RES 2: 99.4850 - High Mar 10 and bull trigger 

*RES 1: 99.3600 - High Apr 01

*PRICE: 99.1700 @ 16:21 BST, Apr 20

*SUP 1: 98.6300 - Low Mar 18

*SUP 2: 98.5700 - Low Jan 2

*SUP 3: 98.1828 - 1.0% 10-dma envelope

Having flatlined for the past week or so, Aussie 10yr futures picked up slightly

across the past two sessions to inch back toward the April highs of 99.36. This

retains the broadly neutral outlook after recent acute intraday volatility and

negates the pre-existing downtrend and any further recovery eyes initially a

break of resistance at 99.3600, Mar 12 high. A break above here opens the

99.4850 bull trigger, Mar 10 high. 

     JGB TECHS: (M0): Stable for Now

*RES 3: 156.02 - High Mar 10 and key resistance 

*RES 2: 154.56 - High Mar 13

*RES 1: 153.50 - High Mar 16

*PRICE: 152.06 @ 16:22 BST, Apr 20

*SUP 1: 150.70 - 1.0% 10-dma envelope

*SUP 2: 150.61 - Low Mar 19

*SUP 3: 150.00 - Psychological round number 

JGB futures remain within the recent range, doing little to alter the technical

outlook. A break north of the Mar 16 high at 153.50 will be needed to switch the

outlook more positive. Downside pressure was recently cemented with the break of

the recent 151.52 low, which opens 150.61 next as well as the psychological

150.00 handle further out. On the upside, initial resistance is seen at 153.50,

Mar 16 high.

TSY FUTURES CLOSE: Well bid after the bell, still off mid-morning highs, late

risk-off support as equities recede back toward early session lows, some citing

"SENATORS UNVEIL BILL TO HOLD CHINA ACCOUNTABLE FOR VIRUS SPREAD" Bbg. Update: 

* 3M10Y  +2.195, 52.131 (L: 43.192 / H: 54.212)

* 2Y10Y  -1.555, 41.828 (L: 41.382 / H: 43.813)

* 2Y30Y  -2.754, 102.469 (L: 102.268 / H: 105.879)

* 5Y30Y  -2.303, 87.591 (L: 87.432 / H: 90.679); Current futures levels:

* Jun 2-Yr futures steady at 110-6.625 (L: 110-05.875 / H: 110-07.125)

* Jun 5-Yr futures up 2.25/32 at 125-15.5 (L: 125-12.25 / H: 125-17.25)

* Jun 10-Yr futures up 7.5/32 at 139-4 (L: 138-29.5 / H: 139-07)

* Jun 30-Yr futures up 1-0/32 at 180-28 (L: 180-01 / H: 181-02)

* Jun Ultra futures up 2-1/32 at 226-20 (L: 224-31 / H: 226-23)

US EURODLR FUTURES CLOSE: Short end weaker, lead quarterly lead selling all day,

futures progressively firmer out the strip, at/near moderate highs. Current

White pack (Jun'20-Mar'21): 

* Jun 20 -0.050 at 99.50

* Sep 20 -0.025 at 99.630

* Dec 20 -0.015 at 99.635

* Mar 21 -0.005 at 99.710

* Red Pack (Jun 21-Mar 22) -0.005 to +0.015

* Green Pack (Jun 22-Mar 23) +0.015 to +0.025

* Blue Pack (Jun 23-Mar 24) +0.020 to +0.030

* Gold Pack (Jun 24-Mar 25) +0.030 to +0.045

US DOLLAR LIBOR: Latest settles

* O/N -0.0024 at 0.0646% (-0.0008 last week)

* 1 Month -0.0054 to 0.6674% (-0.1412 last wk)

* 3 Month -0.0113 to 1.0976% (-0.1098 last wk)

* 6 Month -0.0266 to 1.0758% (-0.1233 last wk)

* 1 Year +0.0003 to 0.9821% (-0.0690 last wk)

US SWAPS: Spds running mixed after the bell, spd curve flatter w/short end

wider/off highs vs. long end on late session narrows. Modest 2-way deal-tied

flow in the mix. Latest spd levels

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

Mon 1545  +1.00/+22.00   +0.25/+12.00   -0.19/+6.81    -1.00/-37.88

1330      +1.75/+22.75   +0.50/+12.25   +0.19/+7.19    -0.88/-37.75

1115      +1.25/+22.25   +0.75/+12.50   +0.50/+7.50    -0.12/-37.00

0930      +1.88/+22.88   +1.06/+12.81   +1.38/+8.38    +0.69/-36.19

Mon Open  +1.88/+22.75   +1.06/+12.69   +0.88/+7.88    +0.62/-36.25

Mon 0700  +1.88/+22.12   +1.06/+12.25   -0.06/+6.94    +0.12/-36.75

Fri 1500  -0.44/+21.06   -0.62/+11.75   -0.19/+7.25    -0.88/-36.62

Friday recap: Spds running tighter across the board after the bell, reversing

modest wides after NY Fed annc'd lower another reduction in daily Tsy securities

purchases next week to $15B from $30B this week. Decent swappable supply

generated two-way flow as well.

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

* Daily Effective Fed Funds Rate: 0.05%, volume: $99B

* Daily Overnight Bank Funding Rate: 0.05%, volume: $244B

US TSYS: REPO REFERENCE RATES (rate, volume levels reflect prior session):

* Secured Overnight Financing Rate (SOFR): 0.03%, $1.231T

* Broad General Collateral Rate (BGCR): 0.02%, $489B

* Tri-Party General Collateral Rate (TGCR): 0.02%, $461B

FED: RECAP NY Fed operational purchases for Monday ($15.5B)

* Tsy 0-2.25Y, $12.000B accepted, $28.877B submitted

* Tsy 7Y-20Y, $3.500B accepted, $12.665B submitted

--

NY Fed operational purchases schedule for Tuesday ($16B)

* 1010-1030ET: Tsy 20Y-30Y, appr $5B

* 1100-1120ET: Tsy 4.5Y-7Y, appr $11B

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

21-Apr 0830 Apr Philadelphia Fed Nonmfg Index (13.4, --)

21-Apr 0855 18-Apr Redbook retail sales m/m

21-Apr 1000 Mar existing home sales (5.77m, 5.30m)

21 Apr 1130 US Tsy $28B  52W Bill auction (9127962Q1)

21 Apr 1130 US Tsy $25B 119D Bill auction (912796XF1)

PIPELINE: $3.65B priced Monday

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

04/20 $1.5B *Cargill Inc $750M 3Y +115, $750M 10Y +150

04/20 $1B #Campbell Soup $500M 10Y +175, $500m 30Y +190

04/20 $600M *Sonoco 10Y +250

04/20 $550M *Kansas City Southern WNG 30Y +230

04/20 ** Nationwide Mutual Ins 40Y +285a ** postponed issuance

Rolled to Tuesday:

04/21 $Benchmark ADB 5Y +28a

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

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