US TSYS: TSY BID EVAPORATES LATE, QUIET END TO WEEK

     US TSY SUMMARY: Tsys finish higher, well off highs w/bid evaporating late.

Generally quiet end to wk after German headlines injected volatility O/N. German

political angst spiked Tsys after spurious headlines that CSU party would end

alliance w/Merkel's CDU party, Tsys quickly retraced as report denied.

- Futures made new highs/risk-off bid on concerns over China tariffs balloon;

decent futures volume by midday (TYU>1.3m); 10YY see-sawed to 2.8876% O/N low

(after topping 3.0% post FOMC) as US$/Yen receded.

- US$ off early highs (DXY -.092, 94.787 vs. 95.131H; US$/Yen -0.02, 110.61 vs.

110.9H); equities off lows (emini -5.0, 2783.5); gold CRATERED (XAU -22.74,

1279.56); West Texas crude took it on chin over-supply concerns (WTI -1.89, 65.0

vs. 64.58L). 2-way flow, better buys, curve flatteners, EDM8 futures/opts

expire.

- Fed speakers resume, Fed Pres Kaplan only sees 3 hikes despite 4 dots from

FOMC; Fed Pres Dudley coming off more hawkish saying Fed needs to keep check on

growing inflation. Tsy cash/ylds: 2Y 99-28.6 (2.553%), 5Y 99-24.5 (2.799%), 10Y

99-18.5 (2.922%), 30Y 101-18 (3.044%)

US TSY FUTURES CLOSE: Higher across the curve but near middle of the range

w/support evaporating late. Curves mixed, update:

* 2s10s -0.268, 36.694 (34.666L/36.962H);

* 2s30s +0.345, 49.241 (46.696L/49.320H);

* 5s30s -0.369, 24.319 (23.719L/25.103H);

Current futures levels:

* Sep Ultra bonds up 18/32 at 157-25 (157-12L/158-22H)

* Sep 30-yr Bond futures up 12/32 at 143-21 (143-12L/144-10H)

* Sep 10-yr futures up 04/32 at 119-18 (119-14.5L/119-27.5H)

* Sep 5-yr futures up 02/32 at 113-07.25 (113-05.5L/113-12.5H)

* Sep 2-yr futures up 0.75/32 at 105-26 (105-25.25L/105-27.5H)

US EURODOLLAR FUTURES CLOSE: Mildly higher across the strip in the middle of the

range, parallel shift across Reds through Golds. Current White pack

(Jun'18-Mar'19):

* Jun'18 +0.015 at 97.675

* Sep'18 +0.020 at 97.530

* Dec'18 +0.020 at 97.335

* Jun'19 +0.020 at 97.195

* Red pack (Jun'19-Mar'20) +0.025-0.020

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

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

* Gold pack (Jun'22-Mar'22) +0.025-0.020

US DOLLAR LIBOR: Latest settles,

* O/N -0.0100 to 1.9256% (+0.2106/wk)

* 1 Month -0.0001 to 2.0849% (+0.0388/wk)

* 3 Month -0.0088 to 2.3259% (-0.0004/wk)

* 6 Month +0.0009 to 2.5037 (+0.0150/wk)

* 1 Year +0.0004 to 2.7722% (+0.0320/wk)

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

* Secured Overnight Financing Rate (SOFR): 1.90% vs. 1.71% prior, $818B

* Broad General Collateral Rate (BGCR): 1.87% vs. 1.68%, $382B

* Tri-Party General Collateral Rate (TGCR): 1.87% vs. 1.68%, $369B

PIPELINE: No new issuance Friday, $10.7B priced Thursday, $24.8B on week

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

06/14 $4B *UnitedHealth 5-part: $400M 3Y fix +48, $350M 3Y FRN +26,

      $750M 5Y fix +70, $1.15B 10Y fix +93, $1.35B 30Y fix +123

06/14 $1.75B *Deutsche Telekom $1.2B 10Y +150, $550M 20Y +175

06/14 $1.2B *CME Group 10Y +80, 30Y +110

06/14 $1B *MGM Resorts upsized from $500M 7NCL sr

06/14 $450M *Ryder WNG 5Y +98

06/14 $1B *GM Financial 5Y +137.5

06/14 $700M *Public Services Co of Colorado, $350M 10Y +78, $350M 30Y +105

- 

On the radar: German based multi-national pharma Bayer AG is looking looking to

issue $6.9B in 3- to 30Y US$ denominated debt to "simplify its capital

structure" after closing it's $63B buyout recently. Aside from US$ denominated

issuance, Bayer also looks to issue appr E14.2B Euro denominated supply between

4- and 12Y tranches in the near term.

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

- Jun 18 Jun NY Fed Business Leaders Index (14.9, --) 0830ET

- Jun 18 Jun NAHB home builder index (70, --) 1000ET

- Jun 18 Atl Fed Pres Bostic, Rotary Club of Savannah, Q&A. 1300ET

US EURODLR OPTIONS: *** Reminder, lead June Eurodollar futures and options

expire Friday (technically, futures and front June options expire Mon morning at

6:00 am ET while Red through Purple midcurves expire at 5:00 pm ET Fri). Despite

significant position unwind effort to avoid pin risk last couple weeks, a

massive amount of open interest remains. Final OI coming into session according

to CME Group Data below:

-- Jun quarterly OI: 5,424,186 (2,975,630 calls, 2,448,556 puts);

-- Jun 1yr midcurve (Red) OI: 3,455,290 (1,696,102 calls, 1,759,188 puts);

-- Jun 2yr midcurve (Green) OI: 2,100,904 (1,164,083 calls, 936,821 puts);

-- Jun 3yr midcurve (Blue) OI: 1,712,946 (912,038 calls, 800,908 puts);

-- Jun 4yr midcurve (Gold) OI: 182,189 (84,002 calls, 98,107 puts);

That's a total of 12,875,515 options (5,424,186 in fronts, 7,451,329 total

midcurves) coming off the sheets.

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* 10,000 Short Jul 71/73 call sprd at 2.5 vs 9703/0.20%

* 5,000 Short Sep 68 put at 5 vs 9701.5/0.30%

* 3,500 Short Dec/Front Dec 75 calls at 0

* 3,000 Short Jul 72/73 2x1 call sprd at 2

UPDATE: Total 80,000 Short Sep 68/70/71 put tree for 2.5, Note: 20k block, 35k

on screen, rest in pit

Block, 13:35:30ET

* 10,000 Short Nov/Green Nov 82 calls at 0.5

* 15,000 Blue Jul 72/75 call sprd at 1 vs 9697/0.10%

* -24,000 Short Dec/Green Dec 82 call at 1.5

* 5,000 Red Dec 66/67 put sprd at 28 vs 9694/0.64%

* 5,000 Short Dec 67/68 put sprd vs Short Dec 73 call for net 0.5 vs

9695.5/0.30%

UPDATE: Total +25,000 Red Jun 67/68 2x1 put sprd at 0.5

* 4,000 Green Aug 73/76 call sprd at 1

* 4,500 Sep 76/77 2x2 call sprd at 0.5 vs 9752.5/0.10%

* +20,000 Green Jul 70 call at 6 vs 9696/0.40%

* +5,000 Dec/Short Dec 75 calls at 0

* 4,000 Blue Jul 72/76 call sprd at 1

* 10,000 Short Dec 66/67 put sprd at 3.5

UPDATE: Total 15,000 Red Jun 67/68 2x1 put sprd at 0.5

* 5,000 Sep 76/77/78 call fly at 1.25

* 5,000 Dec 75/76/77 call fly at 1

* +28,500 Sep 72/73 put sprd at CAB

UPDATE: Total +7,500 Mar 71/72/73/75 put Condor at 3, note +5k in pit, 2.5k on

screen

* 10,000 Short Oct 66/67/68 put fly at 2

* 10,000 Short Dec 63/66/68 put fly at 5

* +5,000 Mar 71/72/73/75 put Condor at 3

* 5,000 Short Sep 67/68 put sprd at 3.5

* 3,000 Mar 67/68/70 put tree at 2 vs 9717.5/0.10%

UPDATE: Total 75,000 Short Sep 68/70/71 put tree for 2.5, Note: 20k block, 20k

pit, 35k on screen

Block, 08:35:23ET

* 10,000 Short Sep 68/70/71 put tree for 2.5, note 35k just after on screen

* 5,000 Dec 71/72 put sprd at 4

* 20,000 Dec 70/71/72 put flys last few minutes

* 4,500 Aug 72/73/75 put flys

Reminder, Jun futures/options expire, final set for former early Monday on LIBOR

set.

Tsy options, Pit/screen:

* 5,000 FVQ/FVU 114.5/115 call spd spds, .5/64 net/Sep over

* 2,000 TYQ 118.5 puts, 12/64

* Update, total +4,000 TYN 119.5/120 strangles, 18- to 17/64 on day

* 3,000 TUN 106 calls, 1.5/64 vs. 105-27.2

Latest screen trade, more decent sell volume

* -30,000 TYN 120.75 calls, 1/64, hit the bid, even/2 current mkt

Latest screen trade, still offered

* -47,500 TYQ 122 calls, 4/64

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

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