ASIA/US/EUROPE BOND & STOCK RECAP: TSYS OPEN NY MIXED, STEEPER

     US TSYS SUMMARY: UPDATE: Treasuries prices rose early Tuesday in NY amid

technical buying, FX-tied buying by black boxes as US$ declined vs. yen.

US TSYS SUMMARY: US Treasuries open Tues NY mixed, steeper after overnight

two-way flows tilted to selling. Data today include auto sales daylong; Fed Gov.

Powell speaks 8:30am ET and Redbook out 8:55am ET and then 9;45 am ET Sep.

ISM-NY. Germany has Tues Reunification Day holiday. 

- TOKYO: Tsys ebbed lower after steady/mixed open. Asian central bank occurred

in Tsys short end, real$ selling intermediates, particularly 10s with asset mngr

and Japanese lifer portfolio selling too. Hong Kong mkts back from Mon holiday,

and Hang Seng surge 3%+, China bank shares outperform after China's Sun reserve

requirement ratio cut for some banks. 

- LONDON: Tsys 2way flow early w/TYZ 10Y futures bounce to steady before selling

off again. Flows had real$ and foreign central bank buying 2s and 3s; Asian

banks, real$ bought 5s, credit-tied sales 10s with prop and option-tied sales,

deal-tied hedging weighed. Cash 10-yr note break over 2.35% yld spurred sales. 

- OVERNIGHT REPO: Tsy 3Y, old 2Y, old 5Y and 10Y tight. 

- HIGH-GRADE CORP/SOVRGN ISSUANCE: Abu Dhabi launched $3B 5Y +65, $4B 10Y+85,

$3B 30Y +130 bps; Brazil 10Y eyed.

GILT SUMMARY: Gilts have sold off in Tuesday London morning session weighed by

mild risk-on sentiment and a reversal of Monday's gains, while disappointing UK

construction PMI only had a limited positive impact. 

- Gilts opened weaker with yields around 2.5bp higher across the board, pretty

much wiping out Monday's gains as markets traded with a mild risk-on tone. The

main news overnight were comments from Fed's Kaplan that he has an "open mind"

for December policy meeting. 

- Gilts extended sell-off ahead of UK construction PMI on light but steady

selling in futures, but bounced off lows as construction PMI dropped below 50

for the first time since August 2016. However, Gilts slipped lower once more,

taking cue from weak Bunds following higher than expected Eurozone PPI data. 

- Looking ahead Brexit Secretary David Davies and Foreign Secretary Boris

Johnson both speak at Conservative Party conference this afternoon. 

- UK breakevens are 0.8-1.6BP wider, while swap spreads are 1-2.5bp tighter.

EGB SUMMARY: Bunds fell further to an intra-day low of 160.65 this morning

following the slide in the Gilt market. UK Gilts put in a startling and somewhat

surprising rally on Monday and today's price action was a push-back. 

- Despite the initial catalyst being Gilt market selling, eurodollar option

activity was one-way bearish and sparse liquidity because of a German holiday

meant that the Bund contract hit air pockets on the way downwards. 

- Despite the uncertainty over the Catalan referendum yields on the Spanish

10-year benchmark remain largely unchanged as the Catalan regional government

seems to be pushing for talks with the Spanish national government rather than

an outright declaration of independence. 

- With the Irish 5Y syndication likely tomorrow, there was a subtle concession

build on the existing Mar-22 but little beyond this one issue. 

- The ECB released the monthly update to PSPP maturities and purchases at

1445BST today. Key will be the amount of German buying, since if this falls

short, the market will assume that the days of QE are numbered in fewer days. 

- The Bund 10Y yield is +3.6bp at 0.487% and 2-10Y spread is 2.8bp steeper.

ECB: PSPP buying relative to capital key in Sept

- Germany 96%

- France 116%

- Italy 111%

- Spain 103%

- Neths 96%

- Belg 111%

- Austria 111%

- Portugal 42%

- Finland 24%

- Ireland 74%

ECB: Big buying in France for PSPP at E11.05bln, well above the capital key of

approx E9.5bln

MNI: ECB: PSPP INCREASE BY E5.092BN TO E1.748TN IN WK/ENDED SEP 29

ECB: CBPP3 INCREASE BY E551MN TO E231.314BN IN WK/ENDED SEP 29

ECB: CSPP INCREASE BY E1.704BN TO E114.658BN IN WK/ENDED SEP 29

ECB: ABS TICKS LOWER BY E19MN TO E24.076BN IN WK/ENDED SEP 29

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

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