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EURJPY TECHS

Gains Considered Corrective

US OUTLOOK/OPINION

GS: Strong Core CPI Expected From A Number Of Categories

US EURODLR OPTIONS

Late Trade

USDJPY TECHS

Bullish Engulfing Reversal Still In Play

FOREX

Will The CHF Strength Drag Down Swiss CPI?

     US TSY SUMMARY: Weaker, near late session lows as mkt fades current Mideast
rhetoric/risk-off tone, unwinding about a third of Fri's long end lead rally.
Unexpectedly large (>$25B) corporate issuance added to sell pressure; late
headlines US preparing to pull out of Iraq may have added slightly to late rate
sale. Tsy yld curves reversed early flattening, running steeper. Gold remains
strong (+14.0), West Texas Crude steady at 63.04.
- Rates traded lower/extends new session lows earlier as geo-pol/safe-haven bid
support evaporates ahead midday. Taking heated US/Iran rhetoric in stride, some
desks anticipated the reversal as long as there is no immediate and/or "visible"
retaliation by Iran (cyber-attacks not deemed a high threat) for US killing
Iran's Soleiman. Volume strong as yld curves moving off earlier flatter levels. 
- Minimal market react to Reuters headlines below, some additional risk-off
unwinding. Fading Mideast tensions via weaker Tsys likely will be temporary:
"U.S.-LED COALITION TELLS IRAQI MILITARY IT WILL WITHDRAW" RTRS.
- The 2-Yr yield is up 1.6bps at 1.5405%, 5-Yr is up 1.5bps at 1.6042%, 10-Yr is
up 1.6bps at 1.8038%, and 30-Yr is up 3.3bps at 2.2772%.
TECHNICALS: 
US 10YR FUTURE TECHS: (H0) Bullish Focus  
*RES 4: 130-28+ High Oct 11
*RES 3: 130-17+ High Nov 1   
*RES 2: 130-04+ High Dec 3 and primary resistance
*RES 1: 129-21   Intraday high
*PRICE: 129-07+ @ 16:10 GMT, Jan 6
*SUP 1: 128-20   Low Jan 3
*SUP 2: 127-29   Low Dec 13 and bear trigger
*SUP 3: 127-18+ 1.618 projection of the Oct 3 to Nov 7 low from Dec 3 high
*SUP 4: 127-00   Round number support
US 10yr maintains a firmer posture following last week's gains. Futures have
breached a key resistance at 129-14, Dec 12 high. The break undermines the
recent bearish focus and instead signals scope for a climb towards 130-04+, Dec
3 high and the primary resistance. A breach of this level would represent a
significant technical break. First support has been identified at 128-20,
Friday's low. A move though this level would again open 127-29, Dec 13 low.
     AUSSIE 10-YR TECHS: (H0) Remains Capped by 50-dma 
*RES 3: 98.8950 - High Dec 10 and 11
*RES 2: 98.8500 - High Dec 18
*RES 1: 98.8163 - 50-DMA
*PRICE: 98.7750 @ 15:57 GMT, Jan 06
*SUP 1: 98.5700 - Low Jan 2 
*SUP 2: 98.5348 - 1.236 projection of Dec 5 - Dec 13 decline from Dec 18 high
*SUP 3: 98.4976 - 1.382 projection of Dec 5 - Dec 13 decline from Dec 18 high
Aussie 10yr futures failed to maintain the recent pace of gains Monday,
faltering at the 98.8162 50-dma before retracing slightly. This keeps the
outlook weak for now, confirming a resumption of the current bearish cycle that
has been in place since Nov 28. The focus is on a move towards 98.5348 and
98.4976 next, both Fibonacci projection levels. Firm short-term resistance has
been defined at the Dec-18 high at 98.8500.
TSY FUTURES CLOSE: Weaker, near late session lows as mkt fades current Mideast
rhetoric/risk-off tone, unwinding about a third of Fri's long end lead rally.
Update:
* 3M10Y  +0.468, 27.504 (L: 22.547 / H: 28.201)
* 2Y10Y  +0.35, 26.098 (L: 23.503 / H: 26.595)
* 2Y30Y  +2.167, 73.55 (L: 69.698 / H: 74.28)
* 5Y30Y  +1.936, 67.261 (L: 64.801 / H: 67.702)
Current futures levels:
* Mar 2-Yr futures down 1.125/32  at 107-25.5 (L: 107-24.75 / H: 107-28)
* Mar 5-Yr futures down 3/32  at 118-31 (L: 118-28.75 / H: 119-06.75)
* Mar 10-Yr futures down 4/32  at 129-8.5 (L: 129-05 / H: 129-21)
* Mar 30-Yr futures down 14/32  at 157-27 (L: 157-22 / H: 158-25)
* Mar Ultra futures down 35/32  at 184-26 (L: 184-17 / H: 186-27)
US EURODLR FUTURES CLOSE: Mildly bid, near middle session range on decent
volume, Blues-Golds outperforming. Current White pack (Mar'20-Dec'20):
* Mar 20 +0.010 at 98.280
* Jun 20 +0.010 at 98.360
* Sep 20 +0.010 at 98.435
* Dec 20 +0.005 at 98.460
* Red Pack (Mar 21-Dec 21) +0.005 to +0.010
* Green Pack (Mar 22-Dec 22) +0.010 to +0.015
* Blue Pack (Mar 23-Dec 23) +0.020
* Gold Pack (Mar 24-Dec 24) +0.020 to +0.025
US DOLLAR LIBOR: Latest settles
* O/N +0.0003 at 1.5370% (+0.0005 last week)
* 1 Month -0.0221 to 1.6921% (-0.0852 last wk)
* 3 Month -0.0016 to 1.8722% (-0.0708 last wk)
* 6 Month +0.0014 to 1.8943% (-0.0278 last wk)
* 1 Year -0.0092 to 1.9549% (-0.0403 last wk)
US SWAPS: Spds crushed amid surge in swappable corporate and supra-sovereign
issuance (>$22.5B) after weeks of inactivity. Aside from deal-tied hedging,
decent flurry two-way flow w/better receivers in 2s, 5s and 7s added to move.
Earlier swap-tied flow coming into the session includes better receivers in 2s,
3s, 8s and 9s, includes mixed fly action: 2s8s9s payer and 7s8s9s receiver flys.
Current spd levels:
Time (ET)   2Y Swap/Mid    5Y Swap/Mid   10Y Swap/Mid   30Y Swap/Mid
Mon 1500    -2.12/+6.50    -2.50/-0.56   -2.38/-6.00    -3.31/-34.56
1345        -2.25/+6.38    -2.38/-0.44   -2.06/-5.69    -3.00/-34.25
1115        -2.75/+5.88    -2.06/-0.12   -1.56/-5.19    -2.25/-33.50
1030        -2.25/+6.38    -1.94/+0.00   -1.88/-5.50    -2.25/-33.50
0915        -2.00/+6.62    -2.06/-0.12   -1.88/-5.50    -2.31/-33.56
Mon Open    -1.75/+6.88    -1.50/+0.44   -1.62/-5.25    -1.56/-32.81
Mon 0715    -1.38/+7.25    -0.94/+1.00   -1.38/-5.00    -1.50/-32.75
Fri 1500    -1.12/+9.06    -0.38/+2.12   -0.38/-3.56    -1.06/-31.25
STIR: Federal Reserve Bank of New York EFFR for prior session:
* Daily Effective Fed Funds Rate: 1.55%, volume: $79B
* Daily Overnight Bank Funding Rate: 1.54%, volume: $187B
US TSYS: REPO REFERENCE RATES: (rate, volume),
* Secured Overnight Financing Rate (SOFR): 1.55%, $1.030T
* Broad General Collateral Rate (BGCR): 1.52%, $375B
* Tri-Party General Collateral Rate (TGCR): 1.52%, $350B
OUTLOOK: *** US Data/speaker calendar (prior, estimate):
07-Jan 0830 Nov trade balance (-45.0B, -43.7B)
07-Jan 0855 04-Jan Redbook retail sales m/m
07-Jan 1000 Dec ISM Non-manufacturing Index (53.9, 54.5)
07-Jan 1000 Nov factory new orders (0.3%, -0.7%)
07-Jan 1000 Nov factory orders ex transport (0.2%, --)
07-Jan 1300 US Tsy $38B 3Y note (912828Z29) auction
PIPELINE: Starting to price
Date $MM Issuer/Rating/Desc/Maturity/Yld; Priced *; Launch #:
01/06 $3B *Enterprise Products Op (EPD) $1B each: 10Y +100, 31Y +145, 40Y +170
01/06 $2B *MetLife Global Funding, $1B each: 3Y +40, 3Y FRN SOFR+57
01/06 $900M *Duke Energy $500M 10Y +68, $400M 30Y +88
01/06 $750M *Kroger 30Y +170
01/06 $650M *Southern California Gas 10Y +77
Waiting to price
01/06 $2.55B #Mexico $1.75B +10Y +150, $800M 2050 Tap +175
01/06 $2.5B #Sumitomo Mitsui Fncl Grp ("SMFG") $1.25B each: 5Y +75, 10Y +95
01/06 $2.4B #Ford Motor Credit $1.5B 3Y +153, $900M 7Y +255
01/06 $2B #Home Depot $750M 10Y tap +62, $1.25B 30Y +90
01/06 $2B #BNP Paribas 11NC10 +125a 
01/06 $1.75B #Ntnl Australia Bank (NAB) $750M 3Y +43, $1B 3Y FRN L+41
01/06 $1.25B #BPCE 5Y +90
01/06 $1.25B #Santander UK, 3Y +57
01/06 $1.25B #GM Financial 5Y +132
01/06 $1.1B #John Deere Cap $550M 5Y +45, $550M 10Y +65
01/06 $1B #Export-Import Bank of India 10Y +150
01/06 $750m #Banco Del Estado de Chile 5Y +110
01/06 $600M #Southern California Edison $100M tap 10y +90, $500M 30Y +140
On Tap for Tuesday
01/07 $500M Kommunalbanken 2Y L+9a
01/07 $Benchmark EIB 5Y +11a
01/?? $Benchmark State of Israel 10Y, 30Y  roadshow
01/?? Additional chatter: Boeing, Heineken, T-Mobile
Eurodollar/Tsy options 
Eurodollar options:
* 10,000 Jun 81/82/83 put trees, 6.0 vs. 98.35/0.15%
* +10,000 Jun 83/86/88 call flys, 3.0
* -11,000 Apr/Jun 82 straddle spds, 2.25, June over on screen
* +6,500 Green Mar 82/83 put spds, 3.5
* +9,000 short Feb 82 puts, 1.0
* Update, over +20,000 (pit/screen) Mar 85/86/87/90 call condors, cab
* -3,000 short Sep 100 calls, cab
* 2,500 short Jun 83/87 1x2 call spds, 6.5
* 1,000 short Mar 81/82/86/87 call condors, 8.5
* +3,000 Feb 83 straddles 12.0 over Feb 85 calls
* +8,000 short Jun 91/93 2x3 call spds, 2.5
* +5,000 Green Mar 80 puts, 1.0 vs. 98.455/0.05%
* +6,000 Green Feb 81/82/87/88 call condors, 10.25 legged
Overnight screen trade, Blocks:
* 10,000 Mar 81 puts vs. 5,000 Jun 82/83 strangles
* 6,500 Mar 82/83 put spds
* >+11,000 Apr/Jun 82 straddle spds, 2.25
* Block, 40,000 Dec 86/88/90 call trees, 0.5
* Block, 20,000 Dec 86/88 1x2 call spds, 1.0
Tsy options:
* +2,500 wk2 TY 129.5 straddles, 40/64
* over 5,500 TUG 107.75 puts, 3.5/64 on screen
* Update, over -32,000 TYG 130.5/131.5/132.5 call flys, 5/64 on screen, closer
* 5,000 USG 157/161 strangles, 57/64 vs. 2,000 USG 159 straddles, 2-20/64, ratio
iron fly, 11/64
* 1,500 FVH 117/118.25/118.75 1x3x2 put flys, 12/64 net
* +2,500 TYG 130.25/131.25 1x2 call spds, 5/64 vs. 129-19.5/0.05%
* 1,400 TYG 128.5/129.25 3x2 put spds, 31/64
* >10,000 TYG 130.5 calls, 10- to 11/64 in small clips since the open
* -3,000 TYG 129.75 calls, 22- to 24/64
* -1,100 USG 158 puts, 54- to 53/64
Salient overnight trade, blocks:
* 8,200 TYH 131.5 calls, 13/64
* >22,000 TYH 131 calls, 20- to 21/64
* >21,000 TYG 129.5 calls, 28/64
* Block, 10,000 USH 156 puts, 51/64
* Block, 15,000 USH 155 puts, 34/64
--MNI Chicago Bureau; tel: +1 312-431-0089; email: bill.sokolis@marketnews.com
[TOPICS: MTABLE,M$U$$$,M$$FI$,MN$FI$,MN$FX$]
MNI Chicago Bureau | +1 312-431-0089 | bill.sokolis@marketnews.com
MNI Chicago Bureau | +1 312-431-0089 | bill.sokolis@marketnews.com