US TSYS HIGHER ON STRONG CORE EGBS,RISK-OFF MOOD,BREXIT NERVES

     US TSYS SUMMARY: US Treasuries ended Wed higher amid EGB strength based on

risk-off flows, Brexit uncertainty; Tsys alsko aided by soft US unit labor

costs. 

- Tsys began higher then rose more until about 10am ET, then the market drifted

off the session highs amid light profit-taking. 

- Tsys had been aided too by a softer dollar/yen, which spurred earlier

black-box buying in Tsys intermediates. 

- Tsy futures had sell-through block trade at 8:39am ET for 5,000 TYH 10Y at

124.19, while was block buy at 8:26am of 8,900 FVH at 116-15.5, a buy through. 

- US govt bond market began NY higher after overnight 2way flow mainly toward

risk-off buying as global stocks pressured by worries from US tax plan

treatment. - US Eurodlr futures saw before 8am ET, sale of 20,000 in EDZ7

contract, then later near 8:29am ET sale of 50,000 EDZ7 at 98.422; also 8:26am

ET block for 2,000 Red packs (EDZ8-EDU9) at 0.035 and then 10:15am ET total of

6,000 Red packs done at +0.375. 

- US Tsy said at Fri noon ET it suspended sales of SLUGS (State and Local Govt

Secs) used in muni bond mkt as Tsy starts to make moves to avoid bumping up

against debt ceiling limit; temporary lift of US debt ceiling expires this

Friday. 

- TSYS 3PM ET: 2Y 1.806%, 3Y 1.912%, 5Y 2.120%, 7Y 2.254%, 10Y 2.330%, 30Y

2.719%.

S TSY FUTURES CLOSE: Higher by the bell, but well off midday highs -- back to

opening levels in long end. Two-way positioning ahead Fri's Nov NFP. Current

futures levels: 

* Mar Ultra bonds up 13/32 at 168-11 (167-19L/169-02H) 

* Mar 30-yr Bond futures up 11/32 at 154-02 (153-17L/154-18H) 

* Mar 10-yr futures up 8/32 at 124-19 (124-09.5L/124-23H) 

* Mar 5-yr futures up 5.5/32 at 116-14 (116-08.75L/116-17H) 

* Mar 2-yr futures up 1.5/32 at 107-05.25 (107-03.75L/107-06.25H)

US EURODLR FUTURES CLOSE: Higher across the strip, off highs w/Greens-Blues

outperforming. Heavy short end sales as 3M LIBOR continues to set' higher.

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

* Dec'17 +0.000 at 98.427 * Mar'18 +0.005 at 98.245 

* Jun'18 +0.015 at 98.100 * Sep'18 +0.015 at 98.010 

* Red pack (Dec'18-Sep'19) +0.020-0.040 

* Green pack (Dec'19-Sep'20) +0.035-0.045 

* Blue pack (Dec'20-Sep'21) +0.035-0.040 

* Gold pack (Dec'21-Sep'22) +0.035-0.030

US SWAPS: Spds mostly wider levels into the close, narrow range w/spd curve

flatter all session. Earlier flow on mild size includes better receivers in the

intermediates, flatteners and two-way fly flow, modest two-way in second half

w/better short end paying. OTC and exchange listed option vol fell in second

half on lack of real vol. Latest spread levels: 

* 2Y +0.38/17.50 

* 5Y +0.38/5.94 

* 10Y +0.19/+1.75 

* 30Y -0.38/-20.12

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

- Dec 07 Nov challenger layoff plans (-3.0%, --) 0730ET

- Dec 07 02-Dec jobless claims (238K, 240K) 0830ET

- Dec 07 NY Fed Dudley welcome chat Higher Educn Fin conf, NY 0830ET

- Dec 07 03-Dec Bloomberg comfort index (51.6, --) 0945ET

- Dec 07 Q3 Service Revenue 1000ET

- Dec 07 01-Dec natural gas stocks w/w (-33Bcf, --) 1030ET

- Dec 07 Tsy announce 3/10/30Y cpn auctns (On Dec11/Dec11/Dec12) 1100ET

- Dec 07 Tsy unveils 1M,3M Bill auctions (for Dec 11th) 1100ET

- Dec 07 NY Fed VP Stiroh keynote: Fincl Serv Ethics conf, NY 1135ET

- Dec 07 Q3 domestic non-financial debt 1200ET

- Dec 07 Oct consumer credit ($20.8B, $17.0B) 1500ET

- Dec 07 Nov Treasury Allotments (final) 1500ET

- Dec 07 06-Dec Fed weekly securities holdings 1630ET

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

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