US TSYS: US/CHINA TRADE, HK TENSION SPURS SAFE HAVEN BUYING

US TSY SUMMARY: Late risk-off move showed skittishness of mkts: equities dropped

but off lows on FT headline: "U.S., CHINA STRUGGLE TO CLOSE PHASE-1 DEAL". Thin

mkt depth, w/accts that aren't already on the sidelines quietly squaring up

ahead Friday and growing anxiety over what Beijing may do to quell Hong Kong

violence.

- Uncertain react to domestic mkt if "Hong Kong Human Rights and Democracy Act"

bill passed in Senate, but don't think China mkts will treat positively.

- Myriad Fed speakers on day did not break new ground, Fed Chair Powell remarks

largely mirrored those made to JEC on Wed. 

- Tsy futures made new session/week highs, flow includes program buying in 10s

and 30s, light fast$ flatteners in short end, modest swap and corporate

deal-tied selling across the curve, Dec/Mar Tsy futures rolling continued at

moderate pace.

- The 2-Yr yield is down 4.7bps at 1.5893%, 5-Yr is down 6.9bps at 1.6218%,

10-Yr is down 7.3bps at 1.8135%, and 30-Yr is down 6.7bps at 2.2976%.

TECHNICALS:

US 10YR FUTURE TECHS: (Z9) Firmer Within Its Bear Channel

*RES 4: 130-02+ High Apr 4

*RES 3: 129-24 Trendline resistance drawn off Oct 8 high

*RES 2: 129-22 50-Day EMA

*RES 1: 129-14 Intraday high

*PRICE: 129-11+ @ 18:49 GMT, Nov 14

*SUP 1: 128-04+ Low Nov 12

*SUP 2: 127-31+ Low Nov 7 and bear trigger

*SUP 3: 127-24+ Projected bear channel base drawn off Sep 3 high 

*SUP 4: 127-06+ 1.236 progression of Sep 3 - Sep 13 decline from Oct 4 high

10yr futures continued to recover as prices correct last weeks sell-off. Prices

have breached initial resistance at 129-12, Nov 7 high and attention turns to

129-24, channel resistance drawn off the Oct 8 high. Clearance of this latter

level would suggest scope for a stronger recovery and open 130-15+, Nov 1 high.

For now the move higher is being viewed as a correction with initial support at

128-04+. The bear trigger for a resumption of weakness is 127-31+.

AUSSIE 3-YR TECHS: (Z9) Rallying

*RES 4: 99.368 -61.8% retracement of the Oct 8 - Nov 8 decline 

*RES 3: 99.350 - High Oct 14

*RES 2: 99.311/315 - 50.0% of the Oct 8 - Nov 8 decline / Oct 25 high

*RES 1: 99.285 - Intraday high

*PRICE: 99.280 @ 19:02 GMT Nov 14

*SUP 1: 99.165 - Low Nov 13

*SUP 2: 99.130 - Low Nov 12

*SUP 3: 99.070 - Low Nov 8 and key support

*SUP 4: 99.055 - 1.000 projection of Oct 8 - Oct 22 decline from Oct 25 high

Sharp gains in the Aussie 3yr continues to dominate this weeks price action,

reversing the bearish tone from last week. Price earlier this week traded

through trendline resistance drawn off the Oct 10 high, paving the way for a

strong recovery towards 99.315, Oct 25 high. This level is also just above the

61.8% retracement of the Oct 8 - Nov 8 decline. A clear breach would open the

76.4% level at 99.368. Support lies at 99.165, Nov 14 low.

AUSSIE 10-YR TECHS: (Z9) Sharp Gains

*RES 3: 98.9550 - High Oct 25

*RES 2: 98.9200 - High Nov 1

*RES 1: 98.9025 - 50.0% retracement of the Oct 8 - Nov 11 decline

*PRICE: 98.8750 @ 19:15 GMT, Nov 14

*SUP 1: 98.7825 - Former channel resistance 

*SUP 2: 98.6850 - Low Nov 13

*SUP 3: 98.6500 - Low Nov 8 and primary support

Aussie 10yr futures have rallied again today. Gains follow yesterday's sharp

climb that resulted in a break of the bear channel resistance at 99.7956. The

channel was drawn off the Oct 9 high. The break out represents an important

short-term bullish development and sets the scene for a stronger recovery

near-term. Attention is on 98.9025, 50% of the Oct 8 - Nov 11 decline. Clearance

of this level would open 98.92, Nov 1 high and 98.9550, Oct 25 high. Support

lies at 98.7825, the former channel resistance.

JGB TECHS: (Z9): Correction Firmly In Place

*RES 3: 153.93 - High Nov 6

*RES 2: 153.62 - Low Sep 17 and former breakout point

*RES 1: 153.46 - High Nov 7

*PRICE: 153.34 @ 19:23 GMT, Nov 14

*SUP 1: 152.79 - Low Nov 14

*SUP 2: 152.44 - Low Nov 13 and key support

*SUP 3: 152.39 - 1.618 projection of Sep 4 - Sep 17 decline from Sep 25 high 

JGB futures have continued to recover with a corrective theme following last

weeks sell-off, firmly in place. With futures pushing higher again today,

attention turns to 153.62, Sep 17 low and the former breakout point. Clearance

of this level would open 153.93, Nov 6 high. A failure ahead of 153.62 is

required to suggest the return of bearish behaviour. This would signal scope for

a retest of the low earlier this week at 152.44. 

US TSY FUTURES CLOSE: Well bid on strong risk-off buying all session, futures

topped best levels of week by midday before scaling back late. Continued yld

curve flattening (for most part). Update:

* 3M10Y  -6.047, 24.864 (L: 22.719 / H: 30.919)

* 2Y10Y  -1.901, 22.49 (L: 21.629 / H: 24.534)

* 2Y30Y  -1.338, 70.928 (L: 69.047 / H: 72.455)

* 5Y30Y  +0.275, 67.472 (L: 65.79 / H: 67.796)

Current futures levels:

* Dec 2-Yr futures up 2/32 at 107-20.75 (L: 107-17.5 / H: 107-21.87)

* Dec 5-Yr futures up 7.25/32 at 118-21 (L: 118-10.25 / H: 118-24.5)

* Dec 10-Yr futures up 12.5/32 at 129-9 (L: 128-22 / H: 129-15)

* Dec 30-Yr futures up 29/32 at 158-17 (L: 157-07 / H: 158-30)

* Dec Ultra futures up 1-17/32 at 185-3 (L: 182-29 / H: 185-29)

US TSY FUTURES: *** Dec/Mar roll update: Slow start with a long way to go ahead

Nov 29 first notice (March futures take lead quarterly position). Dec futures

don't expire until mid-late Dec (10s, 30s and Ultras on 12/19, 2s & 5s 12/31).

Update:

* TUZ/TUH appr 27,600 from -5.88 to -5.12, -5.75 last; 10% complete

* FVZ/FVH appr 43,800 from -10.0 to -9.0, -9.75 last; 7% complete

* TYZ/TYH appr 38,800 from -0.50 to 0.75, -0.50 last; 7% complete

* UXYZ/UXYH 3,100 from -1-12.25 to 1-10.25, -1-12.25 last

* USZ/USH appr 11,400 from 26.25 to 26.75, 26.25 last; 3% complete

* WNZ/WNH appr 14,100 from 24.25 to 24.75, 24.5 last; 2% complete

US EURODLR FUTURES CLOSE: Stronger across the strip, near highs w/Blues-Golds

outperforming. Current White pack (Dec 19-Sep 20): 

* Dec 19 +0.010 at 98.095

* Mar 20 +0.015 at 98.315

* Jun 20 +0.030 at 98.405

* Sep 20 +0.040 at 98.470

* Red Pack (Dec 20-Sep 21) +0.040 to +0.055

* Green Pack (Dec 21-Sep 22) +0.055

* Blue Pack (Dec 22-Sep 23) +0.055 to +0.060

* Gold Pack (Dec 23-Sep 24) +0.055 to +0.060

US DOLLAR LIBOR: Latest settles

* O/N -0.0120 at 1.5270% (-0.0116/wk)

* 1 Month -0.0029 to 1.7625% (+0.0006/wk)

* 3 Month -0.0057 to 1.9041% (+0.0035/wk)

* 6 Month -0.0007 to 1.9216% (-0.0015/wk)

* 1 Year -0.0159 to 1.9711% (-0.0287/wk) 

STIR: Federal Reserve Bank of New York EFFR for prior session:

* Daily Effective Fed Funds Rate: 1.55%, volume: $71B

* Daily Overnight Bank Funding Rate: 1.55%, volume: $172B

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

* Secured Overnight Financing Rate (SOFR): 1.57%, $1.018T

* Broad General Collateral Rate (BGCR): 1.54%, $446B

* Tri-Party General Collateral Rate (TGCR): 1.54%, $418B

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

15-Nov 0830 Oct retail sales (-0.3%, 0.2%)

15-Nov 0830 Oct retail sales ex. motor vehicle (-0.1%, 0.4%)

15-Nov 0830 Oct retail sales ex. mtr veh, gas (0.0%, 0.3%)

15-Nov 0830 Oct imports price index (0.2%, -0.2%)

15-Nov 0830 Oct exports price index (-0.2%, -0.1%)

15-Nov 0830 Nov Empire Manufacturing Index (4.0, 6.0)

15-Nov 0915 Oct industrial production (-0.4%, -0.4%)

15-Nov 0915 Oct capacity utilization (77.5%, 77.0)

15-Nov 1000 Sep business inventories (0.0%, 0.1%)

15-Nov 1100 Q4 St. Louis Fed Real GDP Nowcast

15-Nov 1115 Q4 NY Fed GDP Nowcast

PIPELINE: Appears everything that is going to launch has launched:

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

11/14 $1.5B #Corning $400M 30Y +160, $1.1B 60Y +315

11/14 $1.5B #ANZ $1B 3Y +48, $500M 3Y FRN L+49

11/14 $1B #Nationwide Financial Services, 30Y +162

11/14 $850M *Kansas City Southern $425M 10Y +107, $425M 50Y +192

11/14 $400M #Principal Life 5Y +65

11/?? Chatter: Sprint

11/?? Chatter: T-Mobile US

Eurodollar/Tsy options: 

Eurodollar Options

* +10,000 Jun 90 calls, 2.5

* +5,000 Red Mar'21 100 calls, 1.0

Block, 1103:19ET,

* +10,000 Red Jun'21 85/86/97 broken call trees, 3.5

* +6,000 Mar 83/87 call spds .75 over the Mar 80/82 put spds

* +2,500 Blue Dec 81/86 call over risk reversals, 1.0

* +2,500 Mar 81/82 3x1 put spds, 1.0

* +10,000 short Dec 87 calls, 1.5

* +5,000 Jun 86 calls, 7.0

Screen trade:

* +38,000 Feb 87/92 call spds, 1.0 (reminder, -40k short Feb 86/87 1x2 call spd

blocked overnight, 1.5 two-legs over)

* +25,000 Mar 78/80/81 put trees, 0.5

* +8,000 Red Dec 87/90/92 call trees, 1.0

carry-over limited upside call structure buying covering mid-2020

* +10,000 Jun 86/88/91/93 call condor w/Sep 87/90/92/95 call condors, 5.75 total

package

TSY OPTIONS:

* 9,000 FVG 123.25 calls, 1/64

* 3,000 USG 177 calls, 2/64

* +3,600 TYH 131 calls, 31/64 vs. 129-07.5

* -2,600 TYG 127.5/130.5 strangles, 50/64

* -10,000 TYF 130 calls, 17/64

* +1,500 TYF 131 calls, 11/64 earlierBlock, 0902:10ET,

* 26,140 TYF 131/132 call spds, 7/64

* +2,000 TYH 133/136 1x3 call spds, 1/64

* 1,000 TYG 129 straddles, 1-56/64

Salient overnight flow

* +15,000 TYZ 129.25 calls, 15/64

* 8,000 TYZ 128 puts, 4/64

* 8,000 TYZ 128.25 puts, 8/64

* +6,000 TYZ 127 puts, 1/64

* 10,000 TYF 130 calls, 23/64

* 6,000 TYF 130.5 calls, 15/64

* +5,000 TYF 125 puts

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

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