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USDCAD TECHS

Needle Still Points South

US TSYS

Yields Bounce as Equities Make New Monthly Highs

AUDUSD TECHS

Heading North

EURJPY TECHS

Bull Rally Accelerates

COLOMBIA

Economists Survey Raises 2021 CPI Forecast To 4.9%

     US TSYS SUMMARY: Treasuries ended Tues lower but managed to trim losses in
half after a fairly strong $12B 30Y bond reopening auction. The auction stopped
through to a 2.804% rate, with good 61.9% indirects, and OK 9.03% directs,
leaving manageable 29.1% for dealers to mop up. 
- Tsys began NY weaker after overnight 2way flows, then receded on mild sales
after 0.4% Nov. PPI, 0.3% Core. Tsys sales/shorts into 30Y auction, and sales in
10Y; others sold 2Y, 3Y, 5Ys. Stronger US$/yen pressured Tsys, as did mainly
firmer US stocks. Light US corporate bond issuance arose & mild hedging. 
- Heavy exchg traded optn volume: pick-up in low delta call buying targeting
1H'18; large >35k Feb 5Y put over risk reversal bought. US swaps wider. 
- Heavy buying Mar'18 2Y futures buying short end (>50k TUH, 107-02.5 to-02.75)
spurred earlier modest curve steepen. Tsys post-auction steepener unwinds in
5/30Y, 2/30Y curve, and dip buying. 
- Eurodlr futrs: heavy spd sales, >-20k EDH8/EDH9, 0.400; >-15k EDZ8/EDH9,
0.055) 
- TSYS 3PM ET: 2Y 1.831%; 3Y 1.953%; 5Y 2.172%; 7Y 2.315%; 10Y 2.403%; 30Y
2.782%.
FED: Markets are fully expecting a rate hike from the Fed at this Wednesday's
policy announcement while early 2018 rate hike probability levels holding stable
(MNI PINCH):
* Dec 13 FOMC: 100%
* Jan 31 FOMC: 61.0% for hike after Dec annc
* Mar 21 FOMC: 69.7% for Dec hike/no-go at January annc
* May 2 FOMC: 46% for hike after Dec and March annc
* Jun 18 FOMC: 52.6% for hike after Dec and March annc, no-go at May FOMC
US TSY FUTURES CLOSE: Trading weaker across the curve but well off session lows,
risk-on consolidation post 30Y auction R/O, mild position squaring ahead Wed's
FOMC. Current futures levels: 
* Mar Ultra bonds down 6/32 at 166-18 (165-21L/167-00H) 
* Mar 30-yr Bond futures down 10/32 at 152-23 (152-05L/153-06H) 
* Mar 10-yr futures down 4/32 at 124-04.5 (124-00L/124-11H) 
* Mar 5-yr futures down 1.75/32 at 116-08 (116-05.75L/116-11H) 
* Mar 2-yr futures down .25/32 at 107-03.75 (107-02.25L/107-04.25H)
US EURODLR FUTURES CLOSE: Trading mildly lower across the strip after the bell,
off midday lows on light volume. Current White pack (Dec'17-Sep'18): 
* Dec'17 -0.012 at 98.387 
* Mar'18 -0.005 at 98.225 
* Jun'18 -0.010 at 98.070 
* Sep'18 -0.010 at 97.980 
* Red pack (Dec'18-Sep'19) -0.005-0.015 
* Green pack (Dec'19-Sep'20) -0.015-0.010 
* Blue pack (Dec'20-Sep'21) -0.010-0.015 
* Gold pack (Dec'21-Sep'22) -0.015
US SWAPS: Spds running wider across the curve on narrow range. Quiet session
ahead Wed's FOMC. Earlier flow included 4s5s flattener ($89.7k DV01), $177.8k
4s5s10s fly -- receiving 5s and mild deal-tied flow. OTC and exchange traded vol
steady/mixed, gamma mildly higher. Latest spread levels:
* 2Y +0.31/19.62
* 5Y +0.06/6.25
* 10Y +0.06/+1.12
* 30Y +0.25/-19.50
US PIPELINE: High-grade corporate bond issuance for Tuesday:
-
Date $MM Issuer/Rating/Desc/Maturity/Yld/Leads; Priced *; Launch #:
12/12 $450M #Vornado Realty Baa2/BBB/BBB 7Y+125 C/DB/JPM/JEFF
12/12 $400M *ANZ Aa3/AA-/AA- 144a/RegS 2Y Fxd+45 ANZ/BAML/C
12/12 $250M *ANZ Aa3/AA-/AA- 144a/RegS 2Y FRN +3ml+25 ANZ/BAML/C
12/12 TBD Kor.Elec.Pwr Corp. Aaa2/AA/AA- 11/3 wk meetgs BAML/C/CA
12/12 TBD Lebanon delayed Eurobond from Nov., said MOF
12/12 TBD Israel Electric Baa2/BBB US meetings Oct.30-Nov3 JPM
12/12 TBD Hanjin Bank: Potentl US$ deal w/ KEXIM Guar? BNP/DAIWA/GS
01/02 BM Philippines Baa2/BBB/BBB- 1st week Jan bond? C/CS/DB/MS/SCB
12/12 TBD Quatar eyed $9B in international bonds; no time yet
12/12 BM Korea Southern Pwr Aa2/AA- 11/29-12/5 mtgs BNP/C/HSBC/UBS
US OUTLOOK: Data/speaker calendar (prior, estimate):
- Dec 13 Final day of FOMC policy meeting in Washington
- Dec 13 08-Dec MBA Mortgage Applications (4.7%, --) 0700ET
- Dec 13 Nov CPI (0.1%, 0.4%) 0830ET
- Dec 13 Nov CPI Ex Food and Energy (0.2%, 0.2%) 0830ET
- Dec 13 08-Dec crude oil stocks ex. SPR w/w (-5.6M bbl, --) 1030ET
- Dec 13 FOMC monetary policy announcement, Washington 1400ET
- Dec 13 Fed Chair Yellen press conf, Washington 1430ET
Eurodollar/Treasury Option Summary
Eurodollar options, Pit/screen:
Blocks, 1419:15-:45ET,
* total 21,095 Dec 78 calls, 51.25 -- no futures
* +10,000 Red Dec'18 73/75 put spds, 1.5 vs. 97.86/0.05%
* +5,000 short Jan 77 puts, 2.5 vs. 97.825/0.20%
* 7,000 short Mar 76/77 3x2 put spds 3.0 over short Mar 81 calls
* -5,000 Blue Jun 70/80 call over risk reversals, 1.5
* +15,000 Red Sep'19 71/73 put spds, 5.5 vs. 97.71/0.10%
* -20,000 short Feb 83 calls 0.25 over 10,000 short Mar 81/82/83/85 call condors
* Update, +30,000 Feb 83/85 1x2 call spds, 0.5
* Update, total +17,500 short Mar 75/77/78 2x2x1 put flys, 2.0 w/
* Update, total +17,500 short Mar 76/77/78 put flys, 3.0
* +10,000 Mar 82/83 1x2 call spds, 1.75 (after +85k EDH 83/85 1x2 call spd
bought on screen)
* 10,000 short Dec 78/Green Dec 76 put spds, 1.5 vs. 97.885
* 5,000 short Jan 76/80 call over risk reversals, 0.5 s=vs. 97.815/0.10
* 10,000 short Mar 81/82/83 call trees, 0.5 vs. 20,000 Feb 83 calls, 0.5
* +5,000 Feb 83/85 1x2 call spds, 0.5
* 12,500 short Mar 75/77/78 2x2x1 put flys, 2.0
* 12,500 short Mar 76/77/78 put flys, 3.0
* -10,000 Green Dec 76/77 put spds, 6.0 vs. 97.68/0.44%
* +3,000 short Feb 75/76/77 2x3x1 put flys, 1.0
* Update, total +80,000 Mar 83/85 1x2 call spds on screen, 0.5 net
* +20,000 Dec 83 puts, 0.5 vs. 98.382/0.10%
* 15,000 Green Jan 73/75 2x1 put spds, 0.5
* -1,500 long Green Dec 77 straddles, 79.0
* +10,000 Mar 81/82 2x1 put spds vs. Jan 82/83 strangles, 0.0 net
* +10,000 Mar 81/82 2x1 put spds, 4.5
* 2,000 Feb 83/85 1x2 call spds vs. Feb 81 puts, cab net/puts over
* 1,500 long Blue Dec 77 straddles, 79.0
Screen flow into the open includes
* 25,000 Mar 83/85 1x2 call spds
* 19,000 Dec 83 puts, cab (5,250 Blocked earlier)
* 3,200 Apr 78 puts vs. May 77/78 put strip
Block, 0641:57ET,
* 5,000 Red Dec'18 73/76 put spds, 4.0 vs. 97.86/0.10%
Tsy options, Pit/screen:
* Update, over +45,000 FVG 115.5/117.25 put over risk reversals, 1.5- to 1/64,
15k on screen earlier
* +4,500 TYF 123.75 puts, 12/64 on screen
* -3,300 FVF 116.25/116.75 put spds, 23/64
* 24,000 FVG 115.5/117.25 put over risk reversals, 1.5- to 1/64, 15k on screen
* 2,595 FVG 115.25/117.25 strangles, 7.5/64
* 3,300 TYG 123.5/125.5 risk reversals, 2/64 calls over
* total 10,000 TUG 106.8/107 2x1 put spds, 2.5
* 4,000 TUG 106.8/107 2x1 put spds, 2.5
* 3,000 FVG 115.5/117.25 put over risk reversals, 1/64
* 4,000 FVF 117/117.5 call spds, 1/64
--MNI New York Bureau; tel: +1 212-669-6432; email: sheila.mullan@marketnews.com
[TOPICS: MTABLE,MNUEQ$,M$U$$$,MR$$$$,M$$FI$,MN$FI$]