US TSYS END WEAKER AMID QUIET CONSOLIDATION INTO WED FOMC

     US TSYS SUMMARY: Treasuries end Tues mildly weaker, quiet consolidation

into Wed FOMC meeting and Fed Chr Yellen news conf. The Fed is expected to

unveil Fed balance sheet reduction plan; has $4.5 Trln bal. sheet. 

- Tsys saw mixed flows, quiet action, blipped up when US Pres. Trump told UN

General Assembly he wld "totally destroy" N.Korea if it attacked US or allies,

then mild sales after. Real$ sold blip upward, while real money also had a US

intermediates bid. Some mkt players would like to sell market, but it's not

moving up as wld like. 

- Small Tsy 2/30Y flatteners, mild 2/10Y steepeners. Mkt ebbed on higher

-than-expected 0.6% Aug. import prices, 1.180M Aug. housing starts annualized,

and 1.3M Aug. hsg permits SAAR. Hot money bought TIPS. 

- Tsys 10Y futures held session low price of 125-31/32 after repeated visits

down there; had hit a session high of 126-07/32 earlier; volume was at 790,281. 

- US SWAPS: Fast money paid in both US and Canada swaps. Summary of larger swap

trades since Trump speech: 

- At 10:42 ET appeared to be US$460mln+ payer of USD 2Y at 1.655% 

- At 10:29 ET appeared to be a USD460mln+ payer of USD 2Y at 1.656% 

- At 10:14 ET appeared to be a USD240mln+ payer of USD 5Y at 1.909% 

- TSYS 3pm ET: 2Y 1.401%, 3Y 1.547%, 5Y 1.834%, 7Y 2.072%, 10Y 2.243%, 30Y

2.813%

     US TSY FUTURES CLOSE: Trading lower and close to bottom end of session

range, albeit in light volume, with markets having one eye on Fed FOMC monetary

policy decision tomorrow. Current futures levels: 

* Dec Ultra bonds down 6/32 at 166-16 (166-09L/167-08H) 

* Dec 30-yr Bond futures down 6/32 at 154-05 (154-02L/154-23H) 

* Dec 10-yr futures down 3/32 at 125-31.5 (125-30.5L/126-07H) 

* Dec 5-yr futures down 1.75/32 at 117-28.5 (117-28L/118-01H) 

* Dec 2-yr futures down 0.5/32 at 107-31.5 (107-31L/108-00.75H)

US EURODLR FUTURES CLOSE: Eurodollar futures close steady to marginally lower,

volume below 30-day average, but decent volume in option space. Current White

pack (Dec'17-Sep'18): 

* DEC 17 unch at 98.53 

* MAR 18 -0.005 at 98.44 

* JUN 18 -0.005 at 98.365 

* SEP 18 -0.005 at 98.305 

* Reds (DEC 18-SEP 19) unch to -0.005 

* Greens (DEC 19-SEP 20) unch 

* Blues (DEC 20-SEP 21) unch to -0.005 

* Gold (DEC 21-SEP 22) unch to -0.005

US SWAPS: Spreads running mildly tighter for the most part, light flow included

bank paying in ten year notes; fast money paying occurred in the belly. While

there was some large paying in the short-end as well. Latest spread levels: 

* 2Y +0.3/25.945 

* 5Y -0.43/8.01 

* 10Y -0.65/-3.71 

* 30Y -0.40/-33.675

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

- Sep 20 Second day 2-day FOMC policy meet, Washington DC.

- Sep 20 15-Sep MBA Mortgage Applications (9.9%, --) 0700ET

- Sep 20 August existing home sales (5.44M, 5.48M) 1000ET

- Sep 20 15-Sep crude oil stocks ex. SPR w/w (+5.9M Bbl, --) 1030ET

- Sep 20 FOMC policy annc, 1400ET

- Sep 20 Fed releases Summary of Econ Projections, 1400ET

- Sep 20 Fed Chair Yellen press conf in Washington DC 1430ET

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

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