US TSYS HIGHER; TRUMP NAMES POWELL FED CHR; HOUSE GOP TAX PLAN

     US TSYS SUMMARY: US Treasuries prices ended Thu higher as US Pres. Trump

named Jerome Powell to Fed Chair; and US House GOP unveiled tax reform/ cut

plan, which roiled US stocks earlier amid worries on housing sector effect of

plan idea to limit housing deduction to $500K homes; wd limit SALT (State and

Local Taxes) deduction to $10K includg mortg deduction. 

- Traders also cited FX-tied buying in US Treasuries earlier amid weak US dollar

vs. yen, and then some FX-tied sales amid firmer US dollar 

- Pres. Trump said that Broadcom will be moving HQ back to US from Singapore,

which will bring more than $20B in revenue to US; Trump at 3pm ET formally

unveiled Fed Chair choice Powell before he will leave Friday morning for a

Nov.3-14 Asian trip. 

- Some traders think the US House tax plan will be tweaked for various reasons

and pointed out that "when did you ever hear that the first draft got passed" on

tax legislation, as one trader said. MBS traded steady. 

- TSYS 3PM ET: 2y 1.608%, 3y 1.720%, 5y 2.000%, 7y 2.202% 10y 2.347%, 30y 2.829%

US TSY FUTURES CLOSE: Trades higher/off highs into the close, long end

outperforming since tax cuts/reform annc made, lack of detail disappoints.

Little/no react to expected pick of Jerome Powell as US Pres Trump's pick to

fill Fed chair. Current futures levels: 

* Dec Ultra bonds up 30/32 at 166-02 (165-02L/166-13H) 

* Dec 30-yr Bond futures up 21/32 at 153-13 (152-22L/153-22H) 

* Dec 10-yr futures up 6.5/32 at 125-03.5 (124-28.5L/125-08.5H) 

* Dec 5-yr futures up 2.5/32 at 117-06.5 (117-04L/117-10.25H) 

* Dec 2-yr futures up .5/32 at 107-20.75 (107-20.25L/107-22H)

US SWAPS: Spds running mostly wider by the bell, spd curve on steepest level of

session w/long end quietly adding to Wed's jump. Relatively quiet trade on day

following lack of tax overhaul detail, others sidelined into US Pres Trump pick

to make Powell next Fed chairman (expected). Next up, Fri morning's NFP (+315k

est). Early flow included flurry of light receiving in 2s, 3s and 5s over last

hour, small payer in 10s at 2.34634%. Tactically, desks looking at next week's

supply to provide better entry points for those that missed Wed's widening move.

Over slightly longer time horizon, 10s30s Tsy curve needs to breach flats for

year in order for the spd curve to continue to steepen. That said, the 30Y spd

is over 2-year (inverted) highs today. Latest spread levels: 

* 2Y -0.12/21.25 

* 5Y +0.62/7.75 

* 10Y +0.44/-1.62 

* 30Y +1.00/-25.50

US EURODLR FUTURES CLOSE: Mildly higher by the bell, near session highs on

narrow range. Long end of strip outperforming on rather muted volume. Current

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

* Dec'17 +0.000 at 98.485 

* Mar'18 +0.005 at 98.340 

* Jun'18 +0.010 at 98.225 

* Sep'18 +0.010 at 98.145 

* Red pack (Dec'18-Sep'19) +0.015-0.020 

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

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

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

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

- Nov 03 Sep trade balance (-$42.4B, -$43.5B) 0830ET

- Nov 03 Oct nonfarm payrolls (-33K, +315K) 0830ET

- Nov 03 Oct private payrolls (-40K, +311K) 0830ET

- Nov 03 Oct unemployment rate (4.2%, 4.2%) 0830ET

- Nov 03 Oct average hourly earnings (0.5%, 0.2%) 0830ET

- Nov 03 Oct average workweek, all workers (34.4, 34.4) 0830ET

- Nov 03 Oct Markit Services Index (final) (55.9, --) 0945ET

- Nov 03 Oct ISM Non-manufacturing Index (59.8, 58.6) 1000ET

- Nov 03 Sep factory new orders (1.2%, 1.2%) 1000ET

- Nov 03 Sep factory orders ex transport (0.4%, --) 1000ET

- Nov 03 Q3 St. Louis Fed Real GDP Nowcast (2.92%, --) 1100ET

- Nov 03 Q3 NY Fed GDP Nowcast (1.6%, --) 1115ET

- Nov 03 Mnpls Fed Kashkari; Q&A at Women in Hsg/Fin Wash DC Q/A 1215ET

Eurodollar/Treasury option summary

Eurodollar options

Pit/screen:

* -31,000 Jun 78/82 put spds on screen at 11.0, 120k+ bid for more

* +2,500 long Green Jun 70 puts at 5.5 over Green Sep 71 puts

* -7,500 Mar 83/85/86 put flys, 2.0

* +2,500 Green Dec 76/78/80 put flys, 1.0

* -2,000 Mar 83/Jun 82/Sep 81 straddle strips, 61.0

* total +20,000 Mar 86 calls, 1.0 vs. 98.06

* total -35,000 short Dec 78 puts, 1.0

* +20,000 Mar 80 puts, cab on screen

* -4,000 Mar 83 straddles, 13.0

* +13,000 short Dec 80/81 1x3 call spds, 1.0

* +15,000 short Mar 86 calls, 1.0 vs. 98.065/0.05

* 5,000 short Mar 77/78 put spds, 3.0 vs. 98.025/0.10%

* 5,000 short Nov 78/80 put strip, 1.0 vs. 98.04/0.05%

* Block, 10,000 Jun 80/81 put spds, 3.5 vs. 98.23/0.17%

* +10,000 Green Mar 72/73/76 1x1x2 put trees, 10.0

* -9,500 Apr 81 puts, 4.5 vs. 98.195/0.18%

* 4,500 Blue Dec 76/78 put spds, 12.5 vs. 97.75/0.40%

* 1,000 Blue Jun 77/80 3x2 put spds, 4.5

* +25,000 short Mar 77/78 put spds, 3.5

* +2,500 short Jan 78/80 2x1 put spds, 1.0

* -5,000 short Dec 80 straddles, 13.5

* +8,000 Green Dec 83 calls, cab on screen

* Block, 10,000 Green Nov 78 straddles, 8.0

* Block, 10,000 Green Dec 78 straddles, 17.0

* 5,000 short Jan 83 calls, 1.0, adds to Block

* -4,000 short Nov 80 puts, 1.0 vs. 98.06/0.10

------------------------------

* Block, 10,000 short Jan 83 calls, 1.0 vs. 98.035/0.10% at 0833:38

* Block, 10,000 short Dec 83 calls, 0.5 at 0830:45ET

* 4,000 short Mar 77/82 2x3 call spds, 47.0 vs. 98.01

* 2,750 short Dec 81/Blue Dec 77 put spds, 0.5

* -34,500 short Dec 78 puts, 1.0 ongoing seller

* 7,500 Mar 83/85/86 put flys

* 1,000 Green Nov 77/78 2x3 call spds

* Block, 5,000 short Nov 80 puts, 1.0 vs. 98.065/0.20%

* Block, +7,850 short Mar 86 calls, 1.0 vs. 98.055/0.05%

* Block, +7,000 Jun 75 puts, cab

Tsy options

Pit/screen:

* 1,000 TUZ 107.6/107.7/107.8/108 put condors, 3/64

Latest trade, pit/screen total:

* 7,300 TYZ 124/127 strangles, 8- to 9/64 on screen vs.

* 7,300 TYF 123.5/126.5 strangles, 26/64

* 3,500 TYF 124.5/125.5 2x1 put spds, 1/64

* -2,000 FVZ 117 straddles, 33- to 32.5/64

* +2,500 TYZ 123.75 puts, 5/64

* 1,700 wk1 TY 125 straddles, 24/64

* 1,000 wk2 TY 124.5/125/125.5 call flys, 9/64

* 1,000 TYZ 124.25/124.75 2x1 put spds, 2/64

* -1,800 FVZ 117.75/118 call strip, 6/64

* +1,200 TYZ/TYF 125 straddle spds, 35/64

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

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