US TSYS: TSYS PARE GAINS AHEAD TUE'S INAUGURAL H/H TESTIMONY

US TSYS SUMMARY: Mildly higher/lower half of session range after gradually pared

gains since the London close (curve also steepening out following large

steepener soon after London close). Trade rather quiet ahead Tue's inaugural

semi-annual mon/pol testimony by Fed chairman Powell Tue; overall-volume high

due to ongoing Mar/Jun roll action.

- CME slips large curve steepener print in at 1128:00ET: +11,505 TYM, 120-12,

offered at print time vs. -3,252 WNM, 155-17, sell through -20 bid at print

time. Equities surged (DJIA +380 to appr 25690.0; emini +28.5, 2777.5).

- Decent corp issue on day, $3.5B MUFG 4-part lead high-grade supply after $2B

BoE 3Y priced early in session.

- Swap spds mixed after the bell, spd curve flatter all day w/wing on respective

wides/narrows. Late session flow includes better paying in 2s-5s, in-line with

flatter spd curve. 

- Despite large +7k White pack buy, front end Eurodlr strip under pressure all

day w/3M LIBOR climbing +0.0280 to 1.9842% (+0.0714 last wk).

- Late ylds: 2Y 2.226%, 3Y 2.373%, 5Y 2.603%, 7Y 2.775%, 10Y 2.857%, 30Y 3.154%

US TSY FUTURES CLOSE: Mildly higher across the curve, long end well off session

highs as bid gradually dissipated since London close. Latest curve update:

* 2s10s +0.295, 62.695 (63.498H/60.693L);

* 2s30s +0.957, 92.309 (93.206H/89.520L);

* 5s30s +1.009, 54.560 (55.141H/52.760L);

Current futures levels:

* Mar Ultra bonds up 1/32 at 156-00 (155-24L/156-30H)

* Mar 30-yr Bond futures up 4/32 at 144-06 (143-31L/144-27H)

* Mar 10-yr futures up 3/32 at 120-26.5 (120-21L/121-00.5H)

* Mar 5-yr futures up 1.5/32 at 114-13.75 (114-10L/114-17.25H)

* Mar 2-yr futures up .75/32 at 106-18 (106-16.5L/106-19H)

US TSY FUTURES: Late roll update, heavy volume ahead Wednesday's first notice

date (June futures go "top step" on February 28). March future's staggered

expiration on March 20 for 10s, 30s and Ultras, and March 29 for 2s and 5s.

Latest volume:

* TUH/TUM appr 818K from 7.5 to 8.25; 7.75 last

* FVH/FVM appr 1.5M from 9.25 to 9.75; 9.5 last

* TYH/TYM appr 1.3M from 17.75 to 18.25; 18.0 last

* USH/USM appr 341K from 31.75 to 1-00.75; 1-00.25 last

* WNH/WNM appr 226K from 26.0 to 26.5; 26.25 last

US EURODOLLAR FUTURES CLOSE: Steady to mixed by the close, short end

underperforming, EDH8 making new session lows late, under pressure all day after

3M LIBOR set +0.0280 to 1.9842% (+0.0714 last wk). Current White pack

(Mar'18-Dec'18):

* Mar'18 -0.030 at 97.890

* Jun'18 -0.015 at 97.745

* Sep'18 -0.005 at 97.645

* Dec'18 -0.005 at 97.515

* Red pack (Mar'19-Dec'19) steady to +/-0.005

* Green pack (Mar'20-Dec'20) +0.010

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

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

US DOLLAR LIBOR: Latest settles, 

* O/N -0.0006 to 1.4475 (+0.0031 last wk)

* 1 Month +0.0168 to 1.6480% (+0.0374 last wk)

* 3 Month +0.0280 to 1.9842% (+0.0714 last wk)

* 6 Month +0.0192 to 2.2011% (+0.0758 last wk)

US SWAPS: Spds running mixed after the bell, spd curve flatter all day w/wing on

respective wides/narrows. Late session flow includes better paying in 2s-5s,

in-line with flatter spd curve.

* $480mln+ payer of USD 5Y at 2.71375%-2.72775%

* $240mln payer of USD 2Y at 2.4929%

* $157.4k 2Y-7Y-8Y Fly, receiving the belly

Deal-tied flow in the mix. Spds ran mixed earlier as well, spd curve flatter

w/flurry of paying in 2s post LIBOR set; additional trade since set: payer in 3s

at 2.614%, payer in 5s at 2.7112%, 2s7s flattener, $150K 2s5s7s fly/paying the

belly. Latest spread levels:

* 2Y  +1.88/26.75

* 5Y  +0.50/11.00

* 10Y -0.56/0.12

* 30Y -1.25/-20.00

PIPELINE: *** $3.5B MUFG 4-part and $750M BNI Launched                          

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

02/26 $3.5B #MUFG: $1.5b 5Y fix +85/$750M 5Y FRN, $750M 7Y +100, $500M 10Y +110 

02/26 $2B *Bank of England 144a/Reg-S 3Y                                        

02/26 $400M, *CenterPoint Energy Houston Elec 30Y +82                           

02/26 $1.6B #Starbucks 2-part: $1B 5Y +50, $$600M 10Y +67                       

02/26 $1.5B #Philips 66 ($500M 3NC1 FRN L+60, $800M 10Y +105 $200M Tap PSX

4.875%                                                                          

02/26 $1B #Florida Power and Light 30Y +82                                      

02/26 $1B #Duke Energy ($500M 5Y +47, $500M 30Y +82                             

02/26 $750M, #Burlington Northern Santa Fe 30Y +90                              

02/26 $500M #Cargill 5Y +67                                                     

Potential upcoming issuance in the near term:                                   

Chatter, Chevron Phillips Chemical (CPCHEM); United Overseas Bank (UOB); Korea  

Resources (KORESC); Aegon NV (AEGON)

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

- Feb 27 Fed Chair Powell's semiannual monpol statement release, DC 0830ET 

- Feb 27 Jan Durbl goods new ordrs (2.8%, -2.5%)/ex trans (0.7%, 0.2%) 0830ET 

- Feb 27 Jan adv goods trade gap (-73.3b USD, --) 0830ET 

- Feb 27 Jan adv retail inv (0.2%, --), wholesale inv (0.4%, --) 0830ET 

- Feb 27 24-Feb Redbook retail sales m/m (-0.7%, --) 0855ET 

- Feb 27 Dec FHFA Home Price Index (0.4%, --), Qrt Home $ (1.37%, --) 0900ET 

- Feb 27 Dec Case-Shiller Home Price Index (0.7, --) 0900ET 

- Feb 27 Fed Chair Powell Semiannual MonPol Testimony Hse Finl Srvcs Comm, DC,

1000ET 

- Feb 27 Feb Richmond Fed Mfg Index (14, --) 1000ET 

- Feb 27 Feb Conference Board confidence (125.4, 126.3) 1000ET 

- Feb 27 Feb Dallas Fed services index (22.2, --) 1030ET 

- Feb 27 US TSY TO SELL $22.000 BLN 52W BILL, SETTLE MAR 01 1130ET 

- Feb 27 Jan farm prices 1500ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* +18,000 Mar 78 puts, 1.75-2.0 vs. 97.91/0.20%

* +10,000 Green Jun 65/66/67 put trees, 0.0 vs. 97.20/0.05%

* +7,500 short Apr 78 calls, 1.0 vs. 97.385/0.05%

* -25,000 Blue Jun 72/73 call strips, 19.5 vs. 97.135/0.66%

* -10,000 Jul 73 puts vs.

* +20,000 Aug 72/73 put spds, 0.5 net debit

* +2,000 Blue May71 straddles, 28.5

* -7,500 Dec 75/77 put spds, 16.5

* +20,000 Green Mar 70 puts, 1.5 vs. 97.195/0.14% vs.

* -20,000 Blue Mar 73 calls, 1.5 vs. 97.125/0.10%

Update package trade, 2.5 net credit

* total +20,000 Apr 76/77 put spds, 4.0 vs.

* total -20,000 Jun 77 puts, 6.5

Block, 0930:30ET, adds to 10k in pit

* +10,000 short Jun 71/73 2x1 put spds, 6.0

* -20,000 May 76/77 put spds, 4.75 vs. 97.735/0.37%

* -5,000 Jun 78/81 call spds, 2.0

Package trade, 7.5 net credit

* +15,000 Apr 76/77 put spds, 4.0 vs.

* -15,000 Jun 77 puts, 6.5 w/

* -15,000 short Apr 72 puts, 5.0

* +10,000 short Jun 71/73 2x1 put spds, 6.0

* 3,700 Sep 75/76 2x1 put spds, 1.5

* 2,500 short Apr 76 call/short Jun 68 put strangle, 3.0

Screen highlights by the open include

* total -65,000 Mar 78 puts, 2.25-2.0

* 7,750 Red Mar'19 68/70/71/72 put condors

* 4,850 Sep 75/77 put spds

* 3,000 Green Jun 68/70/71 put flys,

* 1,500 short Apr 73/75/76 put flys

Block, 0710:27ET

* -5,000 Mar 78 puts, 2.0 on the heels of appr -13k at 2.25 on screen

Tsy options, Pit/screen:

* 4,000 TUK 106.6/106.8 call spds, 2/64

* -10,000 TYJ 119.5/122.5 strangles, 29/64

* -8,000 TYJ 119/121.5 2x1 put spds, 2-28/64 net cr

* +2,500 TYJ 119/121.5 call over risk reversals, 1/46 vs. 120-08.5

* +15,000 TYJ 119.5 puts, 17/64 earlier, 38k total on screen

* 5,000 TYJ 117.5/123.5 call over risk reversals, 1/64

* 5,000 wk1 TY 120.5/120.75 call spds, 5/64 vs. 120-09

* 1,500 FVJ 114.5/115 call spds, 8/64

Screen trade heading into the NY open

* 5,000 wk1 10Y 121.25 calls, 3/64

* 5,000 TYJ 118.5/119.5 put spds, 12/64

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

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