Free Trial


     US TSYS SUMMARY: Treasuries prices open NY higher, flatter Thurs, last day
before week's key Fri 8:30am ET US Sept nonfarm payroll employment report. MNI
economist poll has median forecasts of 70,000 for Sept jobs, 4.4% jobless rate,
0.3% Avg Hrly Earnings Gain and 34.4 avg workweek. 
- TOKYO: Action fairly quiet as China, S.Korea still on holidays. Tsys flows
proved 2way: FX-tied buying early as US$ weak vs. Japanese yen; real money
buying and Asian banks buying in 10Y notes; prop selling in 2Ys. 
- LONDON: Ongoing bid with early light selling in long end. Recent real$ sales
occurred in the long end, which contained prices. German Bunds recently leaked
lower on interpretation of ECB minutes. Earlier was a large Italy BTP/German
Bund future spread blocked before 5:04am ET, seemed to be buy BTPs/vs sell
- US SWAPS: Spreads steady/mixed; fast$ 10Y receiving overnight. 
- EURODLR FUTURES: Mostly higher, long end outperforms. 
- O/N REPO: Tsy 3Y and 10Y, old 5Y, old 7Y all tighten. 
- US CORPS/SOVEREIGNS: Nothing firmly scheduled (yet) for today.
EGB SUMMARY: The German 10-year yield is down 1.6 on the day and is currently
trading at 0.434% at 8:24am ET. The Bund yields were also pulled lower by a
rally in French bonds after the French auction results. 
- There was considerable demand for Spanish bonds at today's auction with the
bid to cover ratio for the new 5Y coming in at a healthy looking 2.12x. Given
the Catalan issue, there was a lot of fear leading into the auction. This has
led to a flattening of the Spanish yield curve across all maturities with the
10-year leading the way. 
- Tensions are still visible between the Catalan and the central Spanish
government as Spanish Economy Minister Luis de Guindos rejected the idea of
talks with Catalan leaders. 
- Other peripheral market yields were dragged lower by the demand for Spanish
bonds with the Italian 10-year bond yield dropping to 2.162%. 
- Brent prices reached an intra-day highs of $56.39 per barrel after Russian
President Putin met with Saudi King Salman and said that he was open to the idea
of reducing supplies for a longer period of time.
GILT SUMMARY: UK Gilts are trading steady to higher, with the 5-year part of the
yield curve outperforming despite supply. 10-yr Gilt yield is -3bp at 1.346%. 
- Gilts opened slightly lower, but quickly reversed losses and traded at
unchanged levels as markets digested fallout from the "disastrous" speech by UK
PM May yesterday as Telegraph's headline that 30 MPS were plotting to remove her
from office. 
- Gilts squeezed higher though with markets seeing little concession being built
into the 5-yr area of the yield curve ahead of 2023 Gilt supply. 
- There was a delayed reaction to a tick higher in the tail seen at UK 0.75 2023
Gilt re-opening auction, however, the faded in prices was limited and soon
reversed. DMO sold Stg2.75bln of the 6-yr Gilt at average yield of 0.906% and
covered 2.36 times. 
- Breakevens are around 0.8bp higher across the board, while swap spreads are
mixed with 2-yr 2bp wider and 15-yr 1.5bp tighter. 
- Attention now turns to a raft of US data and Fed speakers, before comments
from BoE's Ian McCafferty at 1700BST.
--MNI New York Bureau; tel: +1 212-669-6432; email:

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.