US TSYS: TSY 5S30S YLD CURVE FLATTER/OFF NEW 10+ YR LOWS

US TSY SUMMARY: Tsys trade steady/mixed into the close, mid- to lower half of

range, curve off new 10+ year flats tapped in the first half (5s30s 26.218L),

modest session volume (TYM<920k) on quiet end to wk. Quiet reversal of support,

long end pared gains prior to U-Mich data and Fed Bullard comments: yld curve

inversion risk "crunch time", current policy rate pressing against 'upper bound'

of neutral, low mkt-based infl measures cautions rate hikes. 

- US$ index lower/off lower (DXY -.082, 92.568; US$/Yen 109.272); equities

firmer (emini +5.75, 2724.5), West Texas crude weaker (WTI -0.82, 70.54 vs.

71.63H); gold weaker (XAU -1.80, 1319.80). 

- Swaps spds tighter/spd curve adding to prior day's steepening w/short end

leading move; 2Y spd currently back to early Feb level (lows for year appr 17.5

during January). Decent rate receiving/payer unwinds in 2s as front end of

Eurodollar strip surges (3M LIBOR -0.0125 to 2.3425%; FRA/OIS collapse -4.25,

35.8) w/others faded move via paying in 2s around 2.7675, receivers in 1s

(2.54875-2.55%), $214k 2s3s7s fly, paying 7s.

- Tsy ylds: 2Y 2.535%, 3Y 2.690%, 5Y 2.835%, 7Y 2.937%, 10Y 2.968%, 30Y 3.107%

US TSY FUTURES CLOSE: trading steady to mildly higher near middle of range.

Curve update:

* 2s10s +0.077, 42.867 (43.734H/41.090L);

* 2s30s -0.800, 56.588 (57.962H/55.547L);

* 5s30s -0.850, 26.839 (28.187H/26.218L);

Current futures levels:

* Jun Ultra bonds up 9/32 at 156-28 (156-14L/157-12H)

* Jun 30-yr Bond futures Steady 00/32 at 143-06 (142-29L/143-21H)

* Jun 10-yr futures Steady 00/32 at 119-12.5 (119-10L/119-17H)

* Jun 5-yr futures up 0.25/32 at 113-9.25 (113-08L/113-11.25H)

* Jun 2-yr futures up 0.50/32 at 105-30.25 (105-29.75L/105-30.75H)

US TSY FUTURES: Jun/Sep roll update, volume light. June future's staggered

expiration on June 20 for 10s, 30s and Ultras, and June 29 for 2s and 5s;

September futures go "top step" on May 31. Latest volume:

* TUM/TUU appr 10.1k from 6.5 to 7.0; 6.75 last

* FVM/FVU appr 3.6k from 9.25 to 9.75; 9.5 last

* TYM/TYU appr 11.0k from 10.5 to 11.0; 10.75 last

* USM/USU appr <10, 26.75 last

* WNM/WNU appr <10, 22.75 last

US EURODOLLAR FUTURES CLOSE: Near top end of narrow range. Heavy buying in the

front end on LIBOR lower set. Current White pack (Jun'18-Mar'19):

* Jun'18 +0.045 at 97.685

* Sep'18 +0.040 at 97.540

* Dec'18 +0.030 at 97.360

* Jun'19 +0.030 at 97.240

* Red pack (Jun'19-Mar'20) +0.025

* Green pack (Jun'20-Mar'21) +0.025-0.020

* Blue pack (Jun'21-Mar'21) +0.020-0.015

* Gold pack (Jun'22-Mar'22) +0.020-0.015

US DOLLAR LIBOR: Latest settles, 

* O/N +0.0012 to 1.7062% (+0.0006/wk) 

* 1 Month +0.0003 to 1.9187% (-0.0090/wk)

* 3 Month -0.0125 to 2.3425% (-0.0265/wk)

* 6 Month -0.0015 to 2.5150 (-0.0049/wk)

* 1 Year -0.0023 to 2.7658% (-0.0108/wk)

REPO REFERENCE RATES: (rate, volume)

* Secured Overnight Financing Rate (SOFR): up to 1.73% vs. 1.72% prior, $737B

* Broad General Collateral Rate (BGCR): up to 1.69% vs 1.68% prior, $357B

* Tri-Party General Collateral Rate (TGCR): up to 1.69% vs 1.68% prior, $342B

US SWAPS: Spds ratcheted tighter/spd curve steeper, adding to prior day's move

w/short end leading the move (opposed to Thu's long end lead widening /

steepening). The 2Y spd back to early Feb lvl (lows for year appr 17.5 during

January). Decent rate receiving/payer unwinds in 2s as front end of Eurodollar

strip surges (3M LIBOR -0.0125 to 2.3425%, -0.0265/wk) w/others fading the move

via paying in 2s around 2.7675, receivers in 1s (2.54875-2.55%), $214k 2s3s7s

fly, paying 7s. Light second half flow continues to fade move, payers in 2s and

3s around 2.76 and 2.86 respectively. Latest spd levels:

* 2Y  -2.69/21.94

* 5Y  -2.31/9.06

* 10Y -1.75/3.00

* 30Y -1.12/-9.12

PIPELINE: Surprisingly decent $41.98B on week

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

No new corporate issuance Friday

- 

$13.65B priced Thursday, 

05/10 $6B *HSBC $2B 3NC2 FRN +60, $2B 6NC5 +112, $2B 6NC5 +100

05/10 $6B *GlaxoSmithKline 5-part:

      $1.25B 3Y fix +55 $750M 3Y FRN +35, 

      $1.25B 5Y +65, $1B 7Y +80, $1.75B 10Y +90

05/10 $1.25B *ANZ $500M 3Y fix +65, $750M 3Y FRN L+46

05/10 $400M *Southern California Fas WNG 30Y +100

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

Data/speaker calendar (prior, estimate): 

- May 14 Clev Fed Pres Mester, Global Interdependence Cntr's Central Bnk Sr's,

Paris, Q&A. 0245ET

- May 14 SF Fed Exec VP Daly, Gender and Career Progression Conf, Q&A 0845ET

- May 14 StL Fed Pres Bullard CoinDesk's Consensus 2018, NY Q&A. 0940ET

- May 14 NY Fed expectations survey 1100ET

- May 14 NY Fed Exec VP Stiroh Financial Stability/Post-Crisis Reforms in

Toronto, Q&A. 1620ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

Block, 1437:17ET

* 17,500 short Jun 72 calls, 2.0 vs. 97.14/0.14%

* +20,000 Green Sep 66/73 strangles 6.0 vs. -10,000 Green Dec 68 straddles 39.0,

27.0 net

* 10,000 Sep 77 call at 1.5 vs 9754/0.12%

* 5,000 Short Jun 72/73 call sprd at 2.5 vs 9713/0.22%

* 10,000 Short Jun 70 put at 1 vs 9713.5/0.15%

* 2,000 Blue Mar 60/61 put sprd at 7 vs 9690.5/0.18%

* 5,000 Short May 71 reversal at 0

UPDATE: Total +15,000 Jun 75/76 put sprd at 1

UPDATE: Total +6,000 Short Dec 67/68 put sprd 1.5 over Short Dec 75 call vs

9696/0.10%

UPDATE: Total -15,000 Jun 76 Straddle at 7.5

* 15,000 Jun 76 straddle at 7.5

* 3,000 Green Sep 70/71/72 call tree over Green Sep 63 put for a net 0.5

* 40,000 Jun 76/77 call sprd at 5

* 10,000 Green Jun 66/68 put sprd at 3

* 5,000 Jun 77/78 call sprd at 1.5

* 10,750 Dec 68/71/73 put fly at 7.5

* 6,000 Dec 70/72 put sprd at 4.5

* 4,000 Green Dec 67/68 3x2 put sprd at 2 vs 9690/0.16%

* 4,000 Dec 71/73 put sprd at 9

* +6,000 Sep 73/75/76 2x3x1 put fly for net 0 vs 9751.5/0.0, covering short,

-20k+ at 2.25 on Apr 16

* 30,000 Short Jun 71 put at 5 vs 9712.5/0.50%

* 3,000 Jun 75/77 3x1 put sprd at 8.5

Tsy options/Pit/screen:

* +5,000 wk3 10Y 120.25 calls, 1/64 vs. 119-08/0.30%

* +5,000 TYM 118 puts, 2/64 vs. 119-10.5/.10%

* +7,500 TYN 119 straddles, 1-4/64

* -15,500 TYN 117.5/118.5 put spds, 12/64 vs. 119-15 adds to appr 15k on screen

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

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