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     US TSYS SUMMARY: *** Treasuries open NY mildly weaker ahead of the FOMC
rate annc Wed, near low end narrow overnight range on light volume (TYZ w/155k)
w/Japan out for one day holiday. Tsys off early London lows as Gilts recover.
USD stronger, equities firmer (emini +4.5, 2501.75), gold weaker (-7.30,
1312.85), oil weaker (WTI -0.26, 49.63). 
- Asia, quiet open w/Tokyo financial mkts closed for holiday, BoJ meets Thu.
Mild risk-on tone, light sideways trade, better sellers w/USD gaining slightly. 
- London, weaker open, two-way flow on net, end users bought 2s, 7s and 30s,
foreign central banks sold intermediates. S&P upgraded Portugal to investment
grade, Bund/SGP 10Y spd 28.8bp tighter. 
- Swaps, mixed, wings tighter vs. wider intermediates, light volume, overnight
repo 5s, 7s and 10s tighter adding to wider swap spds. 
- Eurodollars, mildly lower across the strip, final settle Sep'17 futures 98.675
(3M LIBOR 1.3250%), Dec'17 lead quarterly 98.54 (-0.010).
GILT SUMMARY: It has been a relatively quiet morning session with Gilts
squeezing higher, paring some of the sharp sell-off seen at the end of last
week, with the 10-year Yield seen hovering around 1.30%. Yield curve is bull
steepening with the front-end seen outperforming 
- 2-yr Gilt yield seen -2.9bp at 0.426%, 5-yr -2.5bp at 0.728%, 10-yr -2.2bp at
1.30% and 30-yr -1.3bp at 1.904% according to Tradeweb. 
- Gilts have recovered opening losses and squeezed higher, although there was
little direction seen overnight due to Japanese Holiday. 
- HSBC changed their view on the Bank of England and now see the MPC raising
rates at the November 2017 and May 2018 meetings to bring interest rates to
0.75%, compared to no change this year or next previously. 
- Markets will be listening to comments from BoE Governor Carney in Washington
this afternoon to see if there are hints on future monetary policy. 
- Short sterling strip bear steepened at the opening but has since reversed
losses helped by light but consistent buying in white and red contracts. 
- UK breakevens are tighter across the board with 10-yr 2.9bp lower.
EGB SUMMARY: The big story this morning is the upgrade of Portugal to investment
grade by S&P, which has helped to take the Bund-PGB spread 28bp tighter. The
move pushed Bonos/BTP yields lower and for a while even helped German yields to
- However, the German market feels heavy and there is now a small bear
steepening along the yield curve, with the 10Y yield 0.7bp higher at 0.44%, the
highest yield for around a month. 
- Ireland and Cyprus also saw positive ratings announcements on Friday. 
- Greek debt yields are slightly higher today as the government talks of making
fiscal bonuses to hard-hit member of the population of the better-then-expected
primary surplus. 
- Eurozone final CPI data for August printed in line with the flash estimate.
There has been no other significant data. 
- There have two two bond auctions this morning from Slovakia and Belgium. The
Belgian auctions were well bid and the debt agency was able to sell E3.5bln, the
top end of the 3.0-3.5bln pre-announced range.
--MNI New York Bureau; tel: +1 212-669-6432; email:

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