US TSYS EBB:TRUMP JAN INFRASTRUCTR PLAN,SPD/MERKEL,BREXIT NEWS

     US TSYS SUMMARY: Treasuries ended Thurs weaker after slide as Pres. Trump

said to prepare infrastructure plan for Jan. That compounded Tsys sales on

earlier news that German SPD Party voted for talks with German PM Merkel party,

and as Reuters cited Irish official saying Ireland, Britain "very close" to UK

Brexit deal. 

- Tsys began NY weaker, action quiet into Fri 8:30am ET US Nov jobs; traders

awaited word on expiring-Fri debt ceiling lifting. 

- German Bunds ended mildly weaker amid supply-driven weakness, after decent

Spanish auctions but soft Green French OAT govt bond (followed weak Bund auction

Thu); UK Gilt 30Y auction drew poor demand, Gilt weakness hurt EGBs. 

- US Tsy could announce/do 41-day Cash Mngmt Bill Fri 9:30am ET. FBI Dir Wray

questioned by GOP, Dems in House panel. EU: Tusk Fri Brexit announcement 7:50am

Centrl Europe Time. Tsy will sell $24B 3Y auction Mon, $20B 10Y reopening; Tues

$12B 30Y reopening. 

- US Economic data: 2,000 decline in initial weekly jobless claims. 

- US TSYS 3 PM et: 2Y 1.804%, 3Y 1.918%, 5Y 2.146%, 7Y 2.293%, 10Y 2.376%, 30Y

2.774%

US TSY FUTURES CLOSE: Safe haven unwinds added to late (US$ gained late, US pres

Trump hinted infrastructure plan release in Jan, UK close to Brexit deal)

session selling in Tsys, new session lows, curve bear steepening (2s10s +3.428,

56.233; 5s30s +2.504, 62.176). Current futures levels: 

* Mar Ultra bonds down 1-14/32 at 166-27 (166-17L/168-28H) 

* Mar 30-yr Bond futures down 1-0/32 at 153-02 (152-27L/154-14H) 

* Mar 10-yr futures down 8/32 at 124-11 (124-08.5L/124-20.5H) 

* Mar 5-yr futures down 2/32 at 116-12 (116-10.75L/116-15.75H) 

* Mar 2-yr futures down .25/32 at 107-05 (107-04.5L/107-05.75H)

US EURODLR FUTURES CLOSE: At/near session lows late, safe-haven unwinds on a

variety of factors that included chatter Brexit deal may be annc soon,

infrastructure chatter could be annc'd in January, clean spending bill expected

to pass. Current White pack (Dec'17-Sep'18): 

* Dec'17 -0.007 at 98.417 

* Mar'18 -0.005 at 98.240 

* Jun'18 -0.005 at 98.095 

* Sep'18 -0.010 at 98.005 

* Red pack (Dec'18-Sep'19) -0.015 

* Green pack (Dec'19-Sep'20) -0.020-0.025 

* Blue pack (Dec'20-Sep'21) -0.030-0.035 

* Gold pack (Dec'21-Sep'22) -0.040-0.045

US SWAPS: Spds mixed by the bell, spd curve on session flats with wings on

respective highs/lows. Mixed flow earlier on light size w/spds holding narrow

range, long end rate lock followed by unwind. Muni-tied rate receiving out the

curve late. OTC and exchange listed vol off ahead Fri's Nov NFP. Latest spread

levels: 

* 2Y +1.12/18.94 

* 5Y +0.19/6.19 

* 10Y -0.62/+1.38 

* 30Y -1.50/-21.25

US OUTLOOK: Data/speaker calendar (prior, estimate):

- Dec 08 Nov nonfarm payrolls (261K, 200K) 0830ET

- Dec 08 Nov private payrolls (252K, 194K) 0830ET

- Dec 08 Nov unemployment rate (4.1%, 4.1%) 0830ET

- Dec 08 Nov average hourly earnings (0.0%, 0.3%) 0830ET

- Dec 08 Nov average workweek, all workers (34.4, 34.4 hrs) 0830ET

- Dec 08 Oct wholesale inventories (0.3%, --) 1000ET

- Dec 08 Oct wholesale sales (1.3%, --) 1000ET

- Dec 08 Dec Michigan sentiment index (p) (98.5, 99.0) 1000ET

- Dec 08 Q4 St. Louis Fed Real GDP Nowcast 1100ET

- Dec 08 Q4 NY Fed GDP Nowcast 1115ET

Eurodollar/Treasury Option Summary:

Eurodollar options, Pit/screen:

* -5,000 Green Dec 77/78/80 put trees w/Blue Dec 76/77/78 put tree, 17.0 cr

* +4,000 Red Jun18 70/77 5x2 put spds, 62.5 vs. 97.825

* +5,000 Sep 76/78 put spds, 5.0

* -20,000 Green Jan 77 calls, 7.0 vs. 97.75/0.50%

* +10,000 Red Dec'18 73/83 call over risk reversals, 0.5 vs. 97.875/0.26%

* total +35,000 Apr 82/83 1x2 call spds, 0.75 vs. 98.12

* -7,500 Red Dec'18 77/80 strangles, 19.5

* +3,000 Blue Feb 76 straddles, 21.5

* 5,500 short Apr 72/75 put spds, screen

* 3,000 short Mar/short Apr 77 straddle spds, 4.5

* -3,000 Green Mar/Green Jun 77 straddle spds, 10.0

* -10,000 Feb 81/82/83 put flys on 2x2x1 ratio, wings over for 6.0 net credit

* total 33.5k Dec 83 puts trading on screen at cab, >10k in pit

* +20,000 Mar 82/83 call spds, 3.5 vs. 98.245-.25

* +4,000 short Apr/short Jun 77/78 straddle spd strips, 10.5 total debit

* -5,000 Sep 78/80 put spds, 5.0 vs. 98.035/0.10%

* +5,000 Jun 81/82/83 call trees, 2.5 vs. 98.10-.095

* -40,000 (half on screen) Dec 83 puts, cab and still offered--adding to massive

short open interest in the put (1,079,379 coming into the session; call OI only

168,388) -- likely a safe bet but with diminished return ahead next week's FOMC

annc -- likely a hike -- but certainly NOT more than .25! Incidentally, Dec

options expire next week Friday as well

Tsy options, Pit/screen:

* 5,200 TYF 125.25/125.75 call spds, 5/64

* 1,000 TYF 124.5 straddles, 50/64 after the TYG 124.5 straddle sold at 1-17/64

* +3,700 wk3 US 152.2/152.5 call strip, 10/64

* +3,000 FVG 116.5 calls, 21/64

* +1,000 USF 150 puts, 3/64

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

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