ASIA/US/EUROPE BOND & STOCK RECAP: TSYS GAIN: BOE,FUTURES BUYS

     US TSYS SUMMARY: US Treasuries open NY near overnight high prices, 10Y

yield is at 2.242% vs. 2.269% around 4:40am ET, after recent gains with UK short

Sterling debt as BOE left UK rates unchanged, but cuts its 2018 GDP estimate to

1.6% vs. 1.7% pvs estimate. 

- TOKYO: Tsys began softer then rebounded on decent buying in TYU 10Y Futures

from 126-03.5 to -04 followed by Block buy of 6k at 126-05.5. Also cash 10-year

note drew buying by Japanese accounts and by Asian banks too. China Caixin

services PMI in line with expectations at 51.5. Japanese MOF data showed net

buyers of foreign bonds of Y106.70 in latest week. 

- LONDON: Tsys had knock-on sales in intermediates amid French, Spanish govt

debt supply. Light 2-way position squaring/2-way cash flow kept rates near

steady into the BoE annc. Also was recent potential block: about 40K TYU futures

bought from 126-05 to 06.5; further buying too in 5Ys (20K) and 30Ys (7.5K)

lifts long end to new highs before 7:41am ET. 

- US SWAPS: Spreads steady mixed; sources reported spec acct paying in short

end, fast$ and bank portfolio paying in belly. 

- US EURODLR FUTURES: Steady/mixed, short end softer.

- US CORPORATE BONDS: Thurs: PT Paiton Energy 13Y amortizing (10Y WAL) and 20Y

amortizing (17Y WAL) via BARC/C/DBS/DB/HSBC. 

- O/N RP: Tsy 2Y, 3Y, 5Y, 10Y notes all have mild bid.

GILT SUMMARY: Short sterling debt gained as BOE left rates unchanged, voting

6-2; voted 8-0 to keep corporate bond, Gilt stocks unchanged. Gilts are trading

mixed, with the 2s/10s part of the yield curve slightly flatter following better

than expected UK Service PMI and as markets look ahead to key Bank of England

monetary policy decision and release of MPC minutes and Aug Quarterly Inflation

report. 

- UK Service PMI came in at 53.8 modestly higher than June's 53.4 and beating

MNi median forecast of 53.5. However the detail of the report highlighted the

activity pick up only slightly from 4-month low and business optimism remained

subdued. Overall the three PMI's point to the UK economy rising "just over 0.3%

q/q putting the country on course for another steady but sluggish expansion" in

Q3, Chris Williamson, Chief Business Economist at IHS Markit said. 

EGB SUMMARY: EGBs are currently trading mixed, shrugging off earlier lower move

in wake of solid demand at both Spain and French long-end bond supply, while

markets also eye BoE monetary policy decision. German 10-yr Bund yield last

0.5bp higher at 0.491%. 

- Bunds opened slightly weaker weighed by overnight comments from Fed's

Williams, in-line China Caixin service PMI, EGB long-end bond supply and BoE

policy announcement. 

- Bunds pared losses despite better than expected Italy service PMI and upward

adjustment to French service PMI as Spain 10-yr and 25-yr bond auction saw

strong demand and decent premium. While French 10-yr and 30-yr OAT also saw

solid demand. 

- German/Spain 10-yr spread is now little changed at 96.8bps following SPGB

auctions that saw spread reversing earlier widening move.

--MNI New York Bureau; tel: +1 212-669-6432; email: sheila.mullan@marketnews.com

[TOPICS: MTABLE,MNUEQ$,M$U$$$,MR$$$$,M$$FI$,MN$FI$]