US TSYS: US OPEN FOR BUSINESS (KIND OF), FOMC WED, NFP FRI

US TSY SUMMARY: After a weaker start, rates trade firmer to steady in long end

by the bell, off midday highs. Tsy yld curves got a late boost as long end rate

support evaporated. Equities weaker/off lows (SPX -23.5 2640.0 vs. 2622.25L);

US$ index reversed early gains (DXY -.047, 95.747).

- Quiet start to a busy week -- even if the US Govt hadn't reopened last Friday.

Little data Mon/Tue, but a lot of Tsy supply ahead Wed. FOMC annc (no rate

change expected, "patient" statement). 

- Private ADP employ data Wed, Jan NFP Fri likely moderating (+177k est) after

Dec' blowout jobs gain (+312k), mfg ISM, auto sales for NA and China/U.S. trade

talks are highlights for wk ahead.

- Modest 2-way curve flow by fast$ in 2s vs. 5s and 10s, prop and real$ buying

10s into midday, decent deal-tied hedging, Tsy auction unwinds as well. Trading

desks squaring up ahead FOMC annc Wed, not because of policy uncertainty but due

to concern of "Siberian Express" deep-freeze expected to grip midwest. Tsy

cash/ylds: 2Y 99-26.5 (2.588%), 5Y 100-06.5 (2.579%), 10Y 103-08.5 (2.740%), 30Y

106-03 (3.060%).

MONTH-END EXTENSIONS: *** Preliminary Bloomberg-Barclays US month-end index

extension/forecast summary compared to the average increase for the past year

and the same time in 2018; TIPS 0.11Y; Govt inflation-linked, 0.14Y

*.....................Projected...1Y Avg Incr..Last Jan

*US Tsys.................0.06........0.08........0.07

*Agencies................0.06........0.10........0.05

*Credit..................0.12........0.09........0.08

*Govt/Credit.............0.08........0.08........0.07

*MBS.....................0.06........0.07........0.07

*Aggregate...............0.08........0.08........0.07

*Long Govt/Credit........0.05........0.09........0.07

*Interm Credit...........0.08........0.08........0.08

*Interm Govt.............0.07........0.08........0.06

*Interm Govt/Cred........0.06........0.08........0.08

*High Yield..............0.02........0.08........0.10

US TSY FUTURES CLOSE: Yld curves get late boost as long end bid evaporated into

the close. Quiet start to a busy week -- even if the US Govt hadn't reopened

last Friday. Little data Mon/Tue, but a lot of Tsy supply ahead Wed. FOMC annc

(no rate change expected, "patient" statement). Curves mildly steeper, update:

* 2s10s +0.041, 15.042 (13.181L/15.252H);

* 2s30s +1.433, 47.212 (43.835L/47.423H);

* 5s30s +1.808, 48.337 (45.586L/48.429H);

Current futures levels:

* Mar Ultra bonds down 3/32 at 159-14 (159-09L/160-04H)

* Mar 30-yr Bond futures down 2/32 at 145-01 (144-28L/145-15H)

* Mar 10-yr futures up 2.5/32 at 121-15.5 (121-08.5L/121-19.5H)

* Mar 5-yr futures up 1.25/32 at 114-07.25 (114-03L/114-09.5H)

* Mar 2-yr futures up .38/32 at 105-29.38 (105-28.12L/105-30.12H)

US EURODLR FUTURES CLOSE: Steady to mildly higher after the bell, upper half

modest range on quiet week opener. Current White pack (Mar'19-Dec'19):

* Mar'19 +0.005 at 97.325

* Jun'19 +0.015 at 97.295

* Sep'19 +0.020 at 97.285

* Dec'19 +0.020 at 97.260

* Red pack (Mar'19-Dec'20) +0.010-0.015

* Green pack (Mar'20-Dec'21) +0.015-0.020

* Blue pack (Mar'21-Dec'21) +0.015-0.005

* Gold pack (Mar'22-Dec'22) +0.010

US DOLLAR LIBOR: Latest settles,

* O/N +0.0001 to 2.3848% (+0.0009 last wk)

* 1 Month +0.0017 to 2.5017% (-0.0060 last wk)

* 3 Month -0.0011 to 2.7505% (-0.0094 last wk)

* 6 Month -0.0024 to 2.8298% (-0.0197 last wk)

* 1 Year -0.0015 to 3.0300% (+0.0014 last wk)

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

* Secured Overnight Financing Rate (SOFR): 2.40%, $915B

* Broad General Collateral Rate (BGCR): 2.38%, $459B

* Tri-Party General Collateral Rate (TGCR): 2.38%, $436B

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

29-Jan Day one of two FOMC policy meeting

29-Jan 0855 26-Jan Redbook retail sales m/m (-1.5%, --)

29-Jan 0900 Nov Case-Shiller Home Price Index (0.4, --)

29-Jan 1000 Jan Conference Board confidence (128.1, 124.0)

29-Jan 1030 Jan Dallas Fed services index (-5.0, --)

29-Jan 1130 US TSY $26B 52W bill auction (912796RY7)

29-Jan 1130 US TSY $20B 2Y FRN note auction (9128285Y2)

29-Jan 1300 US TSY $32B 7Y note auction (9128286A3)

PIPELINE: $1.6B Schlumberger 2-Part priced, leads healthy issuance today

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

1/28 $1.6B *Schlumberger $750M +5Y +122, $850M +10Y +157

1/28 $3B #US Bancorp $800M 2Y +45, $900M 2Y FRN L+31, $1.3B 5Y +80

1/28 $1.3B #Codelco 30Y +175

1/28 $1B #Hyundai Capital America $650M 3Y +140, $350M 5Y +173

1/28 $800M #Ontario Teachers Cadillac Fairview 10Y +140

1/28 $950M #National Rural Utilities $450M 10Y +98, $500M 30Y +125

1/28 $600M #Discover Financial WNG 7Y +187.5

1/28 $500M #Nevada Power 10Y +100

1/28 $350M #Comerica 10Y +130

1/28 $1B Colfax $500M 5NC2, $500M 7NC3 -- this week sometime

Eurodollar/Treasury Option Summary 

Eurodollar options, Pit/screen:

* 16,500 Mar 72 puts, 0.75

* 3,000 Jun 71 puts w/short Jun 68/71 2x1 put spds, 4.0 total

Block, 1405:30ET,

* 13,225 short Feb 75 calls, 1.5 mid mkt

* over -90,000 Blue Sep'22 80 calls sold on day from 5.0-5.5 vs. futures around

97.38.

* Paper had been a large buyer (appr 90k) of the calls last fall from 4-4.5 vs.

96.92-.935 (and as bull curve flattener: selling appr 65k Green Jun 77 calls vs.

Blue Sep 80 calls for net credit of 1.0) for pushing open interest to 245,000 as

of today. Legging the curve unwind seems more probable given waning interest in

flatteners, as opposed to reversing the outright calls altogether.

* 4,000 short Mar 66/68 4x1 put spds, even vs. Green Mar 67 puts, 0.5

* +8,000 short Mar 72/73/75 call trees w/Green Jun 82 calls, 5.0 total cr

* -5,000 Mar 72/73 strangles, 0.75

* -5,000 short Jul 73/78 2x3 call spds, 21.0 vs. 97.39/0.50%

* +10,000 short Dec 75 calls, 22.5 vs. 97.385/0.40%

* +10,000 Dec 73 calls, 12.5  vs. 97.255

* +5,000 Sep 71/72 straddle spds, 2.5 71 over

* Update, over 20,000 Blue Sep 80 calls, 5.5-5.0

* 2,000 Sep 67/68/70/71 put condors, 2.5

* 1,400 short Apr 73 straddles, 24.0

* 1,600 Red Sep 80 calls, 13.5

* +10,000 Red Jun 76/78 call spds, 6.0 vs. 97.34/0.10%

* 10,300 Blue Sep 80 calls, 5.5-5.0

* 4,000 Blue Mar 72/75 2x1 put spds

* -2,500 Sep 72 straddles, 23.5

Tsy options, Pit/screen:

* +1,000 wk1 TY 121.5/122 1x2 call spds, 6/64 vs 121-17.5/0.10%

* 1,000 wk1 TY 121.7/122/122.2 call flys, 2/64 vs. 121-16.5/0.05%

* sellers TYH 121.5 straddles, 57/64

* sellers USH 145 straddles, 1-58/64

* 2,300 TYH 121 straddles, 59/64

* +500 TYH 122/123 2x3 call spds, 15/64

* sellers TYK 121.5 straddles, 1-47/64

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

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