US TSYS: TONIGHT'S THE NIGHT FOR TRADE DEALS?

US TSY SUMMARY: Tsys trading near middle of session range -- well off

mid-morning highs when mkt reacted to myriad US/China trade headlines when Pres

Trump held press conf in DC. US/China trade negotiations (to meet at 1700ET

today). Curves mostly steeper, 3M10Y flatter but off inverted levels. 

- Little react to early data, early rate rally more driven by underlying

risk-off tone amid ongoing US/China trade angst and Mideast geo-pol risk. 

- Small tail on latest $19B 30Y Bond auction (912810SH2) awarded 2.892% rate

(2.930% previous) vs. 2.890% WI; 2.20 bid/cover (2.25 previous, 2.43 avg). Corp

supply/related hedging evaporated after placing near $50B on week (BMY and IBM

making up appr 80% of that). 

- On tap for Friday: April Consumer Price Index (CPI); Q2 St. Louis and NY Fed

GDP Nowcasts; Apr Tsy budget balance. Fed speakers include Fed Brd Gov Brainard,

Atl Fed Pres Raphael Bostic, NY Fed President John Williams. 

- The 2-Yr yield is down 3.3bps at 2.2641%, 5-Yr is down 3.5bps at 2.2499%,

10-Yr is down 3.2bps at 2.4512%, and 30-Yr is down 2.5bps at 2.8689%.

US TSY FUTURES CLOSE: Trading near middle of session range -- well off

mid-morning highs when mkt reacted to myriad US/China trade headlines when Pres

Trump held press conf in DC. US/China trade negotiations (to meet at 1700ET

today). Curves mostly steeper, 3M10Y flatter but off inverted levels. Late

levels:

* 3M10Y  -2.962, 2.367 (L: -0.218 / H: 4.097)

* 2Y10Y  +0.019, 18.505 (L: 16.828 / H: 20.159)

* 2Y30Y  +1.241, 60.744 (L: 58.239 / H: 62.421)

* 5Y30Y  +1.662, 62.362 (L: 60.345 / H: 63.709)

Current futures levels:

* Jun 2-Yr futures (TU) up 1.75/32  at 106-15.875 (L: 106-13.75 / H: 106-18.125)

* Jun 5-Yr futures (FV) up 5.25/32  at 115-23.75 (L: 115-17.75 / H: 115-29)

* Jun 10-Yr futures (TY) up 8.5/32  at 124-0.5 (L: 123-23.5 / H: 124-08.5)

* Jun 30-Yr futures (US) up 15/32  at 148-22 (L: 148-04 / H: 149-03)

* Jun Ultra futures (WN) up 14/32  at 166-10 (L: 165-19 / H: 166-30)

US TSY FUTURES: *** Early roll update, but starting to see some calendar spds

trading w/ September taking lead from June at end of this month (first notice

May 31). June future's staggered expiration on June 19 for 10s, 30s and Ultras,

and June 28 for 2s and 5s. Latest volume:

* TUM/TUU appr 38,100 from -6.5 to -6.0, -6.12 last;

* FVM/FVU appr 20,700 from -4.0 to -3.5, -3.5 last;

* TYM/TYU appr 9,900 from -8.5 to -7.5, -7.75 last;

* USM/USU appr 3,800 from 20.5-21.00, 20.5 last;

* WNM/WNU appr 3,050 from -20.25 to -19.5, -19.75 last;

US EURODLR FUTURES CLOSE: Bid across the strip after the bell, but near midrange

as risk-off tone cooled slightly ahead US/China trade negotiations at 1700ET.

Current White pack (Jun 19-Mar 20):

* Jun 19 +0.015 at 97.475

* Sep 19 +0.025 at 97.545

* Dec 19 +0.025 at 97.565

* Mar 20 +0.035 at 97.685

* Red Pack (Jun 20-Mar 21) +0.035 to +0.040

* Green Pack (Jun 21-Mar 22) +0.035 to +0.040

* Blue Pack (Jun 22-Mar 23) +0.035 to +0.040

* Gold Pack (Sep 22-Jun 23) +0.030 to +0.035

US DOLLAR LIBOR: Latest settles resume 

* O/N -0.0039 at 2.3588% (-0.0190/wk)

* 1 Month +0.0020 to 2.4533% (-0.0133/wk)

* 3 Month -0.0099 to 2.5352% (-0.0246/wk)

* 6 Month -0.0006 to 2.5816% (-0.0357/wk)

* 1 Year -0.0116 at 2.7021% (-0.0434/wk)

STIR: Federal Reserve Bank of New York posts yesterday's EFFR:

* Daily Effective Fed Funds Rate: 2.39%, volume: $70B

* Daily Overnight Bank Funding Rate: 2.38%, volume: $158B

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

* Secured Overnight Financing Rate (SOFR): 2.43%, $1.034T

* Broad General Collateral Rate (BGCR): 2.40%, $494B

* Tri-Party General Collateral Rate (TGCR): 2.40%, $459B

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

10-May 0830 Apr CPI (0.4%, 0.4%)

10-May 0830 Apr CPI Ex Food and Energy (0.1%, 0.2%)

10-May 0830 Fed Board of Gov mem Lael Brainard

10-May 0900 Atl Fed Pres Raphael Bostic

10-May 1000 NY Fed Pres John Williams

10-May 1100 Q2 St. Louis Fed Real GDP Nowcast

10-May 1115 Q2 NY Fed GDP Nowcast (2.15%, --)

10-May 1400 Apr Treasury budget balance ($146.9B, $142B

US SWAPS: Narrow range for spds Thu, focus elsewhere (US/China trade, geo/pol

risks) than on swaps, some light two-way positioning in 2s and 5s, no

significant deal-tied flow, 30Y narrowing on back of mildly weak 30Y bond

auction. Latest spd levels:

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

Thu 3:00    +0.00/9.75     +0.19/3.75     +0.00/-1.94   -1.00/-25.75

1:30        +0.00/9.75     +0.12/3.69     +0.00/-1.94   -0.75/-25.50

10:45       +0.56/10.31    +0.31/3.88     -0.00/-2.00   -1.00/-25.75

Thu Open    +0.12/9.88     +0.19/3.75     +0.06/-1.88   -0.50/-25.25

Wed 3:00    +0.06/10.00    -0.31/3.62     -0.31/-1.94   -0.62/-24.88

Wednesday recap: Mildly tighter for the most part, short end resisting move most

of session. Incoming corp supply (notably $20B IBM 8-tranche) contributing to

move, mild two-way in front end w/better rate paying in 2s. 

PIPELINE: O'Reilly Automotive launched

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

05/09 $500M #O'Reilly Automotive WNG 10Y +145a

05/09 $2.5B *Asia Infrastructure Inv Bank (AIIB) 5Y +6

-

$26.55B priced Wednesday ($48.6B/wk), IBM lion's share after $19B BMY Tue

05/08 $20B *IBM 8-part (est. $20-25B):

----  $1.5B 2Y +50, $1.5B 2Y FRN L+/-, 2.75B 3Y +60, $3B 5Y +80, 

----  $3B 7Y +95, $3.25B 10Y +105, $2B 20Y +130, $3B 30Y +145

05/08 $3B *EIB 5Y +6

05/08 $600M *Reinsurance Group 10Y +145

05/08 $400M *USAA Capital Corp WNG 2Y +37.5

05/08 $600M *Bell Canada 30Y +142, upsized from $500M

05/08 $1.5B *MGM China $750M 5NC2, $750M 7NC3

05/08 $450M *AvalonBay 10Y +82 Upsized from $350M

Eurodollar/Tsy options:

Eurodollar options, Pit/screen: 

* +15,000 Jul 76/Sep 78 1x2 call spds, cab/Sep over

* +8,000 Red Jun 81/86 call spds 6.0 ovr short Jun 81 calls

* +4,000 Red Jun 67/71 3x1 put spds, 0.5

* -4,000 short May 77 straddles, 6.0

* -5,000 Jun 76 calls, 0.5

* -5,000 Sep 73/75/76 call flys, 3.5

* +10,000 short Sep/Green Sep 78 call spds, 1.0 Green Sep ovr

* -10,000 short May 77/Green May 78 put spds, 1.0

* -5,000 Green May 77/80 call over call spds, 1.0

* -4,000 Green Jun 78/81 call spds, 7.0

* +10,000 short May 77 straddles, 6.5 vs. short Jun 76/78 strangles, 8.5

* another 2,000 short Jun 76/78 strangles traded 8.5 prior

* -2,000 Blue Sep 77 straddles, 29.5

* +5,000 Jul 73/75/76 call flys, 7.0=

* +5,000 Green Oct 80/82/85 call flys, 3.0

* +10,000 Oct/Dec 72/73 put spd spd, 0.75 pre-data

Additional overnight trade highlights

* over 21,000 short Jul 77 puts, 8.5-9.0

* over 19,500 Dec 72/73 put spds, 2.5

* 5,000 Green Jun 78/80/81 call flys, 2.0

Tsy options, Pit/screen:

* +3,000 FVN 112.75/114.25 2x1 put spds, 0.0

* 2,000 wk2 TY 124.5/124.75/125 call flys, 2/64

* 4,000 TYM 122.25 puts, 2/64 vs. 124-02

* 2,400 TYN 123.5/124.5 call over risk reversals, 18/64 vs. 124-10.5

* 2,340 wk3 TY 122.5/123 2x1 put spds, 1/64

* +2,000 TYM 122.75/123.5 1x2 call spds, 4/64

* +5,000 TYM 122.25 puts, 2/64

* +1,700 TYM 125.5 calls, 6/6

* 20,000 TYM/TYN 112.5 put spd blocked late Wed at 6/64

BLOCK, 0735:50ET

* 10,200 wk3 TY 123.7 puts, 15/64 vs. 124-00.5/0.38%

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

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