ASIA/US/EUROPE BOND & STOCK RECAP: TSYS OPEN NY FIRMER

     US TSYS SUMMARY: Update: By 10am ET, Tsys had come off the morning

safe-haven bid rally highs amid shorts set into 11;30am ET 3Y auction and 1pm ET

10Y reopening.

US TSYS SUMMARY: *** Treasuries prices opened NY higher after safe-haven buying

after an apparent pipe bomb exploded at the nation's biggest bus terminal, NYC

midtown Port Authority Bus station (42nd and Eighth); CBS said suspect arrested

with another explosive device; suspect appears to be the one person injured. 

- Tsy futures spiked higher on the news, made new highs and holding stable off

highs at moment. US equities futures mixed. 

- TOKYO: Tsys opened with mild bid, range into London cross-over. Flow included

Japanese insurance portfolio buying in long end Tsys, 5s30s flatteners in cash. 

- LONDON: Carry-over bid, curve bull flattened after NY subway blast. Long end

paring move amid news suspect is in custody. Sources reported sellers in 5s and

30s Tsys, pre-auction short sets. 

- US SWAPS: Spds wider, spd curve flatter at moment; flow includes fast$

receivers in 5s earlier, paying in 2s and 5s during London hours. 

- EURODLR FUTURES: Decent short end selling after higher 3M LIBOR set. 

- US TSYS SUPPLY: Tsy sells 11:30am ET $24B 3Y auction, 1pm $20B 10Y reopening.

GILT SUMMARY: Gilts have rallied Monday morning led by the 10-yr part of the

yield curve as the shine comes off Friday's Brexit breakthrough agreement

following weekend political comments. 

- 2-yr Gilt yield is -4.1bp at 0.462%, 5-yr -4.9bp at 0.724%, 10-yr -5.7bp at

1.222% and 30-yr -5.2bp at 1.796% according to Tradeweb. 

- Gilts opened modestly higher and then quickly extended gains as Brexit

Secretary David Davis was interpreted saying in a televised interview on Sunday

that the Brexit agreement reached on Friday was not binding and that the exit

payment is contingent on reaching a free trade agreement. This brought short

rebuttal from Ireland saying the deal is binding and would hold UK "to account"

on it. The EU then said the Brexit report is not legally binding ans is a deal

between "gentlemen". 

- There was a large 1.5k Gilt future block which as first appeared to be a buy,

but could of been a sale and reason for temporary halt in the Gilt rally 

- Swaps spreads are wider led by 4bp widening in 2-yr, while breakevens are

modestly tighter led by the 1.3bp fall in 30-yr spread.

EGB SUMMARY: Bunds are modestly firm on Monday, responding mostly to the strong

performance by the Gilt market rather than anything domestic. the 10Y Bund yield

is 1.6bp lower at 0.291%, with most EGB curves flattening. 

- The very long end of the EUR swap curve is performing particularly strongly,

dropping 2.1bp today and outperforming the cash market. There has been quite

considerable amounts of EUR swap activity going through the SDR. Judging by some

of the maturity dates of the swaps, some of the trades are unwinds. 

- The only meaningful economic data release has already been seen. French

business sentiment for Nov remained stable at 106 in November, defying

expectations for a small rise to 107. Despite missing consensus, a level of 106.

Italian retail sales for October showed a 2.1%Y/Y decline. 

- EGB supply is small this week and empty next. A E13bln Schatz redeems on

Friday. 

- The 3m EURUSD cross currency basis has been volatile in the past week but and

has risen 1.5bp today, although it had moved more rapidly earlier in the

morning. 

- 10Y Bund-BTP +1bp to 315.5bp, Bund-Bonos +1.7bp to 111.6bp.

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

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