*** Rates holding mixed levels,.....>

US TSYS SUMMARY: *** Rates holding mixed levels, narrow range heading into the

FOMC annc., no hike expected today or November for that matter, while there is a

lot of speculation and positioning over the Dec 13 FOMC meeting. 

- Some dealers expect Fed to tow the line for a 3rd hike in Dec though markets

only pricing 42.8% chance (granted that's compared to 18.8% 2 weeks ago) of a

go, according to MNI's PINCH model. Balance sheet reduction and dot plot

expected to be main focus today.

- Moderate two-way positioning flow today, flatteners in 2s vs. 5s and 10s,

steepeners in 5s vs 30s, light supra-sov/corp debt issuance.

- Litle react to below exp Aug existing home sales -1.7% to 5.35m saar.

- Swap spds hold tighter levels/session lows across curve despite mild rise in

Tsy ylds heading into FOMC. Light two-way flow, position squaring, ignoring

overnight rep specials in 2s-10s.

- Decent Eurodollar and Tsy option trade on day though trade more two-way, vol

little firmer heading into policy annc, better buying low delta/rate hike plays

out the curve.