US TSYS: TSYS OFF HIGHS POST MINUTES, FED PATIENCE IN REVIEW?

US TSY SUMMARY: Trades modestly higher after the bell, after revisiting early

highs ahead minutes -- bid evaporated on hawkish tone. While majority Fed voters

saw no rate change in '19, "patience" stance may need review. Couple equity sell

programs post minutes but rebound/extend session highs after rate close.

Equities firm (SPX +10.0, 2892.5); US$ index back near lows (DXY -.113, 96.893).

- Earlier, post CPI chop, Tsy rally gained traction w/focus on core slowing for

second month in a row (apparel drop -1.9% largest since 1949), less consumer

inflation pressure = weaker demand raising concern over recession (3M10Y

flattened. Decent two-way trade in fronts to intermediates, hedge fund selling

10s, fast$ buying TIPs, prop and real$ buying intermediates to long end as Tsys

following EGBs higher.

- On tap for Thu: Wkly claims; Mar final PPI; wkly securities holdings. US TSY

$16B 30Y bond auction (912810SF6). Fed speakers: NY Fed Pres Williams, StL Fed

Pres Bullard, Fed Gov Bowman. The 2-Yr yield is down 2.9bps at 2.3212%, 5-Yr is

down 3.2bps at 2.2737%, 10-Yr is down 3.2bps at 2.4685%, and 30-Yr is down

1.9bps at 2.8954%.

US TSY FUTURES CLOSE: Moderately higher across the board/off highs as bid

evaporated in post-minutes trade, curves mixed, equities rebounding now, making

new session highs (SPX +10.25, 2892.75). Curve update:

* 3M10Y  -2.588, 5.464 (L: 4.137 / H: 8.703)

* 2Y10Y  -0.218, 14.674 (L: 14.622 / H: 16.307)

* 2Y30Y  +1.243, 57.478 (L: 56.361 / H: 58.083)

* 5Y30Y  +1.614, 62.304 (L: 60.444 / H: 62.447)

Current futures levels:

* Jun Ultra futures (WN) up 8/32  at 165-16 (L: 164-26 / H: 165-31)

* Jun 30-Yr futures (US) up 9/32  at 148-9 (L: 147-23 / H: 148-17)

* Jun 10-Yr futures (TY) up 5.5/32  at 123-26 (L: 123-17 / H: 123-29.5)

* Jun 5-Yr futures (FV) up 4/32  at 115-20.75 (L: 115-14.75 / H: 115-23)

* Jun 2-Yr futures (TU) up 1.25/32  at 106-13.875 (L: 106-12.25 / H: 106-14.75)

US EURODLR FUTURES CLOSE: Mildly higher after the bell, renewed selling in short

end after minutes come out with a hawkish tinge. Current White pack

(Jun'19-Mar'20):

* Jun 19 -0.005 at 97.445

* Sep 19 steady at 97.495

* Dec 19 +0.005 at 97.520

* Mar 20 +0.015 at 97.640

* Red Pack (Jun 20-Mar 21) +0.020 to +0.035

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

* Blue Pack (Jun 22-Mar 23) +0.030 to +0.035

* Gold Pack (Jun 23-Mar 24) +0.020 to +0.025

US DOLLAR LIBOR: Latest settles

* O/N -0.0045 at 2.3885% (-0.0052/wk)

* 1 Month -0.0020 to 2.4820% (+0.0104/wk)

* 3 Month +0.0223 to 2.6035% (+0.0114/wk)

* 6 Month -0.0015 to 2.6270% (-0.0176/wk)

* 1 Year -0.0140 at 2.7401% (-0.0110/wk)

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

* Secured Overnight Financing Rate (SOFR): 2.45%, $970B

* Broad General Collateral Rate (BGCR): 2.42%, $463B

* Tri-Party General Collateral Rate (TGCR): 2.42%, $442B

US SWAPS: Front end spds continue to grind wider, dragging balance of spds off

earlier lows. In-line, heavier rate paying in 1s (>$2B nominal) around

2.5690-2.5675%, 2s and 7s (around 2.361-2.375%; mixed flys last hour includes

2,3,4 receiver and 2s5s6s payer. Earlier -- 2Y popped wider in post 3M LIBOR

higher set/front end selling, rate paying around 2.443%-2.4352%. Spds were

tighter on back of Tue's healthy issuance. Latest spd levels:

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

1:30        +1.25/9.88    -0.12/3.38     -0.38/-1.88   -0.75/-25.00

12:15       +1.38/10.00   +0.06/3.56     -0.12/-1.62   -0.31/-24.56

10:45       +1.88/10.56   +0.50/4.00     +0.06/-1.44   -0.19/-24.44

9:00        +1.38/10.06   +0.12/3.62     -0.12/-1.62   -0.31/-24.56

Wed Open    +1.12/9.75    +0.12/3.62     -0.25/-1.75   -0.31/-24.56

Wed 7:30    +1.12/9.75    +0.00/3.50     -0.31/-1.81   -0.44/-24.69

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

11-Apr 0830 06-Apr jobless claims (202K, 210K)

11-Apr 0830 Mar Final Demand PPI (0.1%, 0.3%)

11-Apr 0830 Mar PPI ex. food and energy (0.1%, 0.2%)

11-Apr 0830 Mar PPI ex. food, energy, trade (0.1%, --)

11-Apr 0930 US Fed VC Clarida, econ outlook, mon/pol summit, DC

11-Apr 0935 NY Fed Pres Williams, Neighborhood & Housing Dev conf, NY Q&A

11-Apr 0940 StL Fed Pres Bullard, eco/mon-pol outlook, Tupelo Mo, Q&A

11-Apr 1030 05-Apr natural gas stocks w/w

11-Apr 1300 US TSY $16B 30Y bond auction (912810SF6)

11-Apr 1600 US Fed Gov Bowman, Community Banking in Age of Innovation, SF,

California.

11-Apr 1630 10-Apr Fed weekly securities holdings

PIPELINE: Slow build after much better issuance Mon-Tue

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

04/10 $400M Public Storage 10Y +115a

04/10 $Benchmark Panama 7Y +150a

- $19.25B total priced Tuesday, inaugural Saudi Aramco lead w/$12B

04/09 $12B *Saudi Aramco $1B 3Y +55, $2B 5Y +75, $3B 10Y +105, $3B 20Y +140, $3B

30Y +155

04/09 $2B *Toyota Motor Cr $1.25B 1.5Y FRN L+15, $750M 3Y +38

04/09 $3B *Staples $2B 7NC3 7.5%, $1B 8NC3 10.75%

04/09 $1B *Province of Manitoba 5Y +26

04/09 $750M *DBS Group 3Y +58

04/09 $500M *Waste Connections Inc. 10Y +103

Eurodollar/Tsy options:

Eurodollar options, Pit/screen:

* near 23,000 Dec 75/77 2x1 put spds on screen last couple minutes

* 7,500 Jul 75/76 2x3 call spds, 2.75

* -7,500 Dec 73 straddles, 23.5 earlier

* -5,000 Green Apr 76/78 call spds 15.5 over the Green May 78/81 call spds

* additional outright buyer Green May 78/81 call spds, 5.5

* +2,500 Jun 76/77 call spds, 0.5 vs. 97.445/0.10%

* +7,500 Dec 68/71/73 2x3x1 put flys, 3.5 net/wings over

* -4,000 short Jun 76/77 strangles, 14.0

* -3,000 short Sep 72/73 put strip, 3.5 vs. 97.745/0.10%

* -25,000 Jun 72/73 1x2 call spds, 4.0 vs. 97.45/0.76%

* -6,000 Sep 73/75 put spds, 6.0 vs. 97.505

* buyers Red Jun 62 puts at cab

* +10,000 Green Sep 71/90 put over risk reversals, 0.5 vs. 97.845 (ongoing bid

for 71 put)

* 3,000 short Sep 72/73 put strip, 3.5 earlier vs. 97.745/0.10%

Block, 0919:38ET

* +10,000 Green Sep 71 puts, 1.0 vs. 97.80/0.05%

* +25,000 Green Jul 73/76 2x1 put spds, 2.5 1-leg over vs. 97.82/0.11%

* +5,000 Green May 78/80/81 call trees, 1.5

* +3,000 Sep 77/78 call spds, 1.0

* +8,000 Dec 75/76 call spds, 2.5 over Dec 71/72 put spds, 1.0

* -2,500 short Sep 77 straddles, 32.5

Tsy options, Pit/screen:

call/put condor strip

* +2,000 FVM 114.5/115/115.25/115.5 put condors, 2.5 w/

* +2,000 FVM 115.75/116/116.25/116.75 call condors, 1.0

Block, 1126:57ET, rolling out

* +36,913 TYK/TYM 124.5 call spds, 14/64 -- still offered

* 1,900 TYK 124/125.5 1x2 call spds, 1/64

* +1,000 TYN 127/130 1x3 call spds, 1/64

* -2,000 TYM 123/125 strangles, 29/64

* 1,250 TUK 106.2/106.6 2x1 put spds, 12/64

* Update, over +5,000 FVM 115.75/116/116.25/116.75 call condors, 1/64

* -15,000 TYK 124.5/125.5/126.5 call flys, 3/64 vs. 123-18.5

* 3,000 FVM 115 puts, 9.5

* 1,000 USK 148 calls, 40/64

* -3,500 TYK 124 calls, 12/64 earlier

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

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