US TSYS: TSY REVERSE GAINS/EQ'S RALLY, TARIFF TEMPEST/TEACUP

US TSY SUMMARY: Reversal Wednesday: rates steady/weaker, equities higher. Tsys

grudgingly reversed early risk-off support as equities gradually reversed steep

losses (in turn, an early reversal of Tue's late rally for stocks). Tariff

tempest in a tea-cup -- initial react tied to China annc "reciprocal" tariffs in

turn on $50B US imports. Civilian aircraft, engines, equipment/parts tops list.

- US$ index weaker (DXY -0.77, 90.123); equities higher (emini +20.0, 2633.25;

INDU, +113.0); gold mildly higher (XAU +.72, 1333.54); West Texas crude little

weaker, well off early lows (WTI -0.13, 63.38).

- Little react to better than exp Mar ADP (+241k), Tsys holding firmer for much

of first half on weaker equities, concern over trade war/China. Comm Sec Ross

party-line words did little to mollify mkt concerns. Mkt turned after eco cncl

advisor Kudlow hinted tariffs w/China may not go into effect. 

- No react to Fed Bullard/dove comment: further rate hike not necessary.

- Mid-morning two-way trade from specs, fast$ in shorts to intermediates; real$,

bank portfolio buying intermediates to long end late.

- Late ylds: 2Y 2.282%, 3Y 2.413%, 5Y 2.602%, 7Y 2.726%, 10Y 2.788%, 30Y 3.029%

US TSY FUTURES CLOSE: Weaker across the board now, long end underperforming

after trading stronger much of the session. Curve update:

* 2s10s +0.629, 50.134 (50.539H/47.843L);

* 2s30s +1.146, 74.228 (74.746H/71.682L);

* 5s30s +0.896, 42.262 (43.170H/40.831L);

Current futures levels:

* Jun Ultra bonds down 12/32 at 158-27 (158-24L/160-02H)

* Jun 30-yr Bond futures down 7/32 at 145-21 (145-18L/146-18H)

* Jun 10-yr futures down 1/32 at 120-26 (120-25L/121-05H)

* Jun 5-yr futures down .75/32 at 114-09 (114-08.5L/114-15.75H)

* Jun 2-yr futures down .25/32 at 106-09 (106-09L/106-11.5H)

US EURODOLLAR FUTURES CLOSE: Steady/mixed in t he short end, weaker out the

strip. Current White pack (Jun'18-Mar'19):

* Jun'18 +0.005 at 97.690

* Sep'18 +0.000 at 97.605

* Dec'18 +0.000 at 97.495

* Jun'19 +0.000 at 97.405

* Red pack (Jun'19-Mar'20) steady to +0.005

* Green pack (Jun'20-Mar'21) -0.005-0.010

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

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

US DOLLAR LIBOR: Latest settles,

* O/N +0.0025 to 1.7019% (+0.0050/wk)

* 1 Month +0.0131 to 1.8906% (+0.0075/wk)

* 3 Month +0.0038 to 2.3246% (+0.0128/wk)

* 6 Month +0.0002 to 2.4600% (+0.0076/wk)

* 1 Year +0.0109 to 2.6809% (+0.0173/wk)

     REPO REFERENCE RATES: (rate, volume)

* Secured Overnight Financing Rate (SOFR): 1.83% vs 1.80% prior, $825B

* Broad General Collateral Rate (BGCR): 1.81% vs. 1.77% prior, $344B

* Tri-Party General Collateral Rate (TGCR): 1.81% vs. 1.77% prior, $321B

US SWAPS: Spds still running wider by the bell, short end pared early

widening/back to near steady since rates reversed gains. In addition to some

deal-tied flow following trades over last hour include

* $143.4k 2Y-3Y-4Y Fly, receiving the belly

* $190mln payer of USD 1Y at 2.4387%

* $180mln receiver of USD 3Y at 2.677%

* $260mln payer of USD 2Y at 2.5933% prior to more recent 22-way

* modest steepener flow in 2s3s and 5s10s

PIPELINE: $1.25B Societe Generale PerpNC10 launched

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

04/04 $1.25B #Societe Generale PerpNC10 1.675%

04/04 $800M #Aegon 30NC10 Tier 2 Fixed to FRN 5.75%

04/04 $500M BNG Mining 4Y FRN 3ML +7a

OUTLOOK: - Apr 05 Mar challenger layoff plans (-4.3%, --) 0730ET 

- Apr 05 31-Mar jobless claims (215k, 225k) 0830ET 

- Apr 05 Feb trade balance (-$56.6B, -$56.7B) 0830ET 

- Apr 05 01-Apr Bloomberg comfort index 0945ET 

- Apr 05 30-Mar natural gas stocks w/w (-63Bcf, --) 1030ET 

- Apr 05 Atl Fed Pres Bostic, Fin. Literacy Day, Sarasota, Fl, Q&A. 1300ET 

- Apr 05 Mar Treasury STRIPS Holdings 1500ET 

- Apr 05 04-Apr Fed weekly securities holdings 1630ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

Latest Block, 1401:26

* 10,000 Green Dec 67 puts, 10.0 vs. 97.13/0.27

* +10,000 Green Jun 70/71 put spds, 4.5

* -2,000 Green Dec 71 straddles, 49.0

* -3,000 Jun 77/Sep 76 straddle spds, 5.0

* +5,000 Jun 75/76 put spds 2.5 over Apr 76 put

* +3,000 Green Sep 66/68 put spds, 4.5 w/

* +3,000 Green Sep 67/70 put spds, 7.0

* -15,000 Jun 78/80 put spds, 11.5

* -12,500 short Dec/Green Dec 73 call spds, carry-over conditional steepener

interest, 0.5 net credit

Block, 1309:30ET, adds to 6,750 in pit

* +10,000 short Apr 72/75 strangles 2.0 vs. 97.32/0.25%

* +40,000 Blue Jun 76/78 call spds, 1.0

* -12,500 short Dec/Green Dec 73 call spds, carry-over conditional steepener

interest, 0.5 net credit

Updating earlier pit/screen trade volumes

* just over +28,000 (8k screen) short Dec 81 puts, 94.5

* 15,000 Dec 71/72 put spds

* -7,000 short Dec 75 calls, 10.0

* 5,000 Jun 76/77 1x2 call spds

* 3,000 Green Apr 71 straddles, 11.5

* 3,000 Green Apr 68/70/71 put flys, 2.0

* 3,000 Green Apr 72/73/75 call flys, 2.0

* 2,500 Apr/May 76 3x2 put spds, 2.5

* 2,500 Dec 71/72 put spds even vs. Dec 80 calls

* +10,000 Jun 78/81 1x2 call spds vs. short Jun 78 calls, cab net, adding to

+50k Tue

* 5,000 Jun 76 puts, 4.0

* 4,000 Green Jun 68/70/71 put flys on screen

Tsy options, Pit/screen:

* +4,000 TYM 121 straddles, 1-26/64

* 2,700 FVM 114.75 calls, 18/64 on screen

* -1,000 FVM 113.5 puts, 6.5/64

* 2,000 TYK 118.5/122.5 strangles, 2/64

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

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