US TSYS:GENERAL RISK-ON TEMPERED LATE AS EQ'S SCALE BACK GAINS

US TSY SUMMARY: Quiet end to the week, Tsys traded weaker all day, extending

move after BTP/Bund spds reversed earlier widening (5Y -37.0 to 274.0) on the

back of comments from European Eco-Affairs Comm Moscovici: "EU'S MOSCOVICI:

ITALY STRONGLY COMMITTED TO EU, EURO", "EU WON'T INTERFERE IN ITALY ECONOMIC

POLICIES", "EU NOT WILLING TO LECTURE ITALY GOVT ON BUDGET" all bbg headers.

- Incidentally, pound sterling surged to session high of 1.3104 on headline:

"U.K. IS SAID TO DROP BREXIT DEMAND ON IRISH BORDER TO EASE DEAL" bbg;

pound-sterling scaled back move soon after.

- Risk-on tone tempered in second half as equities scaled back gains on couple

large program sales, tech and semiconductor heavy.

- Heavy two-way flow in EDZ8 Eurodollar futures, strong buying early as 3M LIBOR

didn't set as high as anticipated. FRA/OIS gapped 2.0 tighter -- but gradually

retraced move in second half w/EDZ'8 trading lower (total EDZ8 volume >610k).

- Tsy cash/ylds: 2Y 99-22.5 (2.908%), 5Y 99-06 (3.051%), 10Y 97-09.5 (3.196%),

30Y 92-28 (3.380%).

US TSY FUTURES CLOSE: Trading weaker, off midmorning lows, strong volume (TYZ

1.80M); curves flatter; update:

* 2s10s -1.035, 28.788 (27.801L/31.066H);

* 2s30s -1.181, 47.130 (45.923L/49.812H);

* 5s30s -0.506, 32.951 (32.078L/34.677H);

Current futures levels:

* Dec Ultra bonds down 19/32 at 149-25 (149-15L/150-14H)

* Dec 30-yr Bond futures down 10/32 at 137-26 (137-17L/138-07H)

* Dec 10-yr futures down 05/32 at 117-31.5 (117-28.5L/118-06H)

* Dec 5-yr futures down 3.75/32 at 112-2.5 (112-1.25L/112-07H)

* Dec 2-yr futures down 02/32 at 105-6.75 (105-6.25L/105-09H)

US EURODOLLAR FUTURES CLOSE: Trading slightly lower, middle of a tight range,

strong volume (EDZ8 589k). Current White pack (Dec'18-Sep'19):

* Dec'18 -0.010 at 97.235

* Mar'19 -0.010 at 97.065

* Jun'19 -0.015 at 96.915

* Sep'19 -0.020 at 96.810

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

* Green pack (Dec'20-Sep'21) -0.030-0.025

* Blue pack (Dec'21-Sep'21) -0.025-0.020

* Gold pack (Dec'22-Sep'22) -0.025-0.020

US DOLLAR LIBOR: Latest settles, 3-, 6-, 1Y surge higher

* O/N +0.0009 to 2.1711% (+0.0000/wk) 

* 1 Month +0.0022 to 2.2818% (+0.0021/wk) 

* 3 Month +0.0081 to 2.4771% (+0.0407/wk) 

* 6 Month +0.0294 to 2.7235% (+0.0714/wk) 

* 1 Year +0.0198 to 3.0203% (+0.0570/wk)

PIPELINE: Slow finish to week after decent start, $23.38B priced on week

Date $MM Issuer/Rating/Desc/Maturity/Yld/Leads; Priced *; Launch #:

No new issuance Friday

-

$1.05B priced Thursday

10/18 $550M *Progressive +10Y +85

10/18 $500M *MuniFin 2Y FRN L+1

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

- Oct 22 No data or speaker events scheduled for Monday

- Oct 23 Oct Philadelphia Fed Nonmfg Index (37.4, --) 0830ET

- Oct 23 20-Oct Redbook retail sales m/m (0.1%, --) 0855ET

- Oct 23 MN Fed Pres Kashkari, Innovat'n Early Childhood Dev', K-12 Edu Conf,

MN, 0930ET

- Oct 23 Oct Richmond Fed Mfg Index (29, --) 1000ET

- Oct 23 Atl Fed Pres Bostic, Eco Outlook, MonPol, LSU, Baton Rouge, Q&A. 1330ET

- Oct 23 Dal Fed Pres Kaplan, 7th Ann Eco Dev' Summit, Galveston, Tx, Q&A.

1415ET

- Oct 23 Chi Fed Pres Evans, Eco Outlook, MonPol, Northwestern, Evanston, IL,

Q&A. 1815ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/Screen: 

* +4,000 Jun 66/67/68 put flys, 2.75

* +2,500 Dec 72/73/75 call flys, 2.5

* +4,000 Dec 71 puts, 1.25

* +2,500 Red Dec 67/72 1x2 call spds, 6.5

* -15,000 Red Mar 65 puts at 14 vs 9674/0.37% vs.

* +6,000 Green Dec 66 puts at 4.5 vs 9672.5/0.34%

* +10,000 Mar 70/71/72 call fly at 2.5

* +5,000 Dec 72/73 call sprd at 3.75

* +15,000 Red Sep 55/57 5x4 put spds, 7.5, 4-leg ovr

Block, 1015:11ET,

* 12,725 Dec 71/72 put spds, 3.5 vs. 97.26/0.35%

* +/-15,000 Dec 70/71 put spds, 0.75

* -2,500 Dec 72 puts, 4.5

* +2,000 Dec 72/73/75 call flys, 3.0

* 1,000 Green Dec 67 straddles, 19.0

Block, 0846ET,

* 10,000 short Dec 63/65 put spds, 0.5 net

Screen trade, flurry limited upside call flys

* appr +13,000 Mar 70/71/72 call flys, 2.5

* +8,500 Jan 71/72/73 call flys, 1.75

Late overnight screen trade includes

* just over 48,000 Dec 71 puts from 1.75 to 1.25, hear buyer on highs pre-Libor

set

* appr 10,000 Dec 72/73/75 call flys

* 4,000 Jan 71/72/73 call flys

* 5,000 Mar 71 straddles, checking price

Tsy options, Pit/screen:

* +18,000 TYX 119.5 calls, 1/64 on screen

* -3,200 TYZ 118.25 calls, 5/64 covered

* -4,200 TYZ 117/119 call over risk reversals, 2/64 vs. 117-29.5

* +/-2,000 TYZ 118 straddles, 1-1/64

* +5,000 TYZ 119/119.5 call spds, 5/64 earlier

* -2,750 TYZ 116/120 strangles, 7/64

--MNI Chicago Bureau; tel: +1 312-431-0089; email: bill.sokolis@marketnews.com

[TOPICS: MTABLE,M$U$$$,M$$FI$,MN$FI$,MN$FX$]