US TSYS: Tentative Risk Appetite Return

US TSY SUMMARY: Broadly weaker but off late session lows after the bell, NY Fed

reduction in avg daily Tsy securities buys next week to $15B from $30B spurred

fast bout of selling in last hour as underlying support eases. 

- Tentative return of risk appetite: Combination of staggered US reopen

guidance, Boeing resuming production and hopes Gilead's antiviral drug

remdesivir will be answer to pandemic spurring risk appetite. Tsys weaker on the

open, equities higher but holding to rather narrow range (EDM0 +47.0 late).

- Corporate issuance: Ford rounds out the week with whopping $8B 3pt issuance,

$14.5B total on session for just over $92B for week.

- Fed enters media blackout ahead April 28 FOMC, runs through Apr30

- The 2-Yr yield is down 0.5bps at 0.2019%, 5-Yr is up 0.1bps at 0.358%, 10-Yr

is up 1.7bps at 0.6433%, and 30-Yr is up 3.8bps at 1.2618%.

TECHNICALS:

US 10YR FUTURE TECHS: (M0) Dips Are Likely Corrective      

*RES 4: 140-24   High Mar 9 and key contract high

*RES 3: 140-00   Round number resistance 

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

*RES 1: 139-13   High Apr 16  

*PRICE: 139-10 @ 15:40 BST, Apr 17

*SUP 1: 137-16   Low Apr 7

*SUP 2: 136-29+ Low Mar 24  and key near-term support

*SUP 3: 135-26   50-day EMA

*SUP 4: 134-22   Low Mar 20

10yr futures are off recent highs however a bullish outlook remains intact. 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 136-29+, Mar 24.

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: 99.740 @ 15:41 BST Apr 17

*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 all time 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: 99.1850 @ 15:42 BST, Apr 17

*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: 152.19 @ 15:44 BST, Apr 17

*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: Broadly weaker but off late session lows after the bell, NY

Fed reduction in avg daily Tsy securities buys next week to $15B from $30B

spurred fast bout of selling in last hour as underlying support eases. Update: 

* 3M10Y  +4.558, 51.716 (L: 44.34 / H: 53.389)

* 2Y10Y  +2.177, 43.584 (L: 39.09 / H: 45.195)

* 2Y30Y  +4.287, 105.367 (L: 98.416 / H: 106.996)

* 5Y30Y  +3.639, 90.154 (L: 85.395 / H: 91.049); Current futures levels:

* Jun 2-Yr futures down 0.875/32 at 110-6.5 (L: 110-05 / H: 110-07.75)

* Jun 5-Yr futures down 2.75/32 at 125-14.25 (L: 125-06.25 / H: 125-20.5)

* Jun 10-Yr futures down 8.5/32 at 138-31 (L: 138-17 / H: 139-14)

* Jun 30-Yr futures down 1-9/32 at 180-04 (L: 179-16 / H: 182-01)

* Jun Ultra futures down 3-10/32 at 225-08 (L: 224-16 / H: 229-19)

US EURODLR FUTURES CLOSE: Steady to mixed in the short end, progressively weaker

out the strip. Current White pack (Jun'20-Mar'21): 

* Jun 20 +0.010 at 99.550

* Sep 20 +0.010 at 99.655

* Dec 20 steady at 99.650

* Mar 21 steady at 99.720

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

* Green Pack (Jun 22-Mar 23) -0.02 to -0.005

* Blue Pack (Jun 23-Mar 24) -0.035 to -0.01

* Gold Pack (Jun 24-Mar 25) -0.05 to -0.025

US DOLLAR LIBOR: Latest settles

* O/N +0.0000 at 0.0670% (-0.0008/week)

* 1 Month -0.0455 to 0.6727% (-0.1412/wk)

* 3 Month -0.0262 to 1.1090% (-0.1098/wk)

* 6 Month -0.0225 to 1.1025% (-0.1233/wk)

* 1 Year +0.0006 to 0.9218% (-0.0690/wk)

US SWAPS: 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. Latest spd levels

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

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

1200      +0.19/+21.69   +0.38/+12.75   +0.56/+8.00    +0.25/-35.25

0930      +0.06/+21.56   +0.12/+12.50   +0.31/+7.75    +0.62/-34.88

Fri Open  +0.00/+21.50   +0.19/+12.56   +0.31/+7.75    +0.75/-34.75

Fri 0730  +0.50/+22.00   +0.38/+12.75   +0.06/+7.50    +0.25/-35.25

Thu 1500  -0.06/+21.31   -0.25/+12.38   +0.62/+7.38    +1.12/-36.12

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%, $1.223T

* Broad General Collateral Rate (BGCR): 0.02%, $477B

* Tri-Party General Collateral Rate (TGCR): 0.02%, $456B

FED: RECAP NY Fed operational purchases for Friday

* Tsy 20Y-30Y, $4.000B accepted, $8.461B submitted

* Tsy 4.5Y-7Y, $7.000B accepted, $27.275B submitted

* Tsy 0-2.25Y, $15.000B accepted, $36.963B submitted

* TIPS 7.5-30Y, $3.500B accepted, $6.163B submitted

* Tsy 1Y-7.5Y, $3.500B accepted, $7.066B submitted

--

FED: *** NY Fed lowers daily avg Tsy sec buys: $15B from $30B

NY Fed operational purchases schedule for Monday ($15.5B)

* 1010-1030ET: Tsy 0-2.25Y, appr $12B

* 1100-1120ET: Tsy 7Y-20Y, appr $3.5B

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

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

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

NY Fed operational purchases schedule for Wednesday ($7B)

* 1010-1030ET: Tsy 7Y-20Y, appr $3.5B

* 1100-1120ET: TIPS 1Y-7.5Y, appr $3.5B

NY Fed operational purchases schedule for Thursday ($21B)

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

* 1100-1120ET: Tsy 2.25Y-4.5Y, appr $16B

NY Fed operational purchases schedule for Friday ($15.5B)

* 1010-1030ET: Tsy 0-2.25Y, appr $12B

* 1100-1120ET: Tsy 7.5Y-30Y, appr $3.5B

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

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

18-Apr 1200 Fed enters media blackout ahead April 28 FOMC, runs through Apr30

20-Apr ---- No significant data Monday

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, 5.37m)

PIPELINE: Ford rounds out the week with whopping $8B 3pt issuance, just launched

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

04/17 $8B #Ford Motor Co 3Y 8.5%, 5Y 9.0%, 10Y 9.625%

04/17 $1.25B #Bank of NY Mellon 5Y +125

04/17 $4.25B *IADB 3Y +15

04/17 $1B *AFDB 2Y +15

Eurodollar/Tsy options

Eurodollar options:

Block 1447-1448ET, with another 20,000 on screen soon later

* 20,000 Jun 90/92 put spds, 2.0 vs. 99.54/0.11%

counter trend to day's better limited downside put fly buying

* 30,500 Red Jun 96/97/98 call flys

* Update, 10,000 May 92/93/95 put flys

Block 1140:37ET,

* 12,500 Jun 90/91 put spds, 0.75 vs. 99.53/0.037

ongoing interest limited downside put flys -- moving out the curve

* 9,760 Jun 92/93/95 put flys

* Update, 71,000 Mar 92/95/97 put flys, 3.5

* +8,000 Sep/Dec 95/96/98 broken call flys strip 0.0 (Dec legs add to 10k recent

Block)

Block 0856:18ET,

* 10,000 Dec 95/96/98 broken call flys, 0.0

* 8,700 Mar 100 calls, 4.5

* 6,000 Green Sep 90/91 put spds

* 2,000 Blue May 92/97 call spds

* Update, 55,000 Mar 92/95/97 put flys, 3.5

Limited downside targeting higher rates

* 44,000 Mar 92/95/97 put flys, opener

* 5,000 May 92/93/95 put flys

* 7,400 Jun 88/90/91 put flys

Tsy options:

Very limited overnight volumes, salient flow so far

* 7,500 TYK 138 puts, 8/64

* 8,400 FVM 126.25 calls 

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

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