US TSYS MILDLY WEAKER, 30Y HIGHER;RANGEBD 2WAY FLOW;ASIA BID

     US TSYS SUMMARY: Treasuries ended Thurs mainly mildly weaker, 30Y higher

amid fairly rangey trading, curve flattening, and a mixed/OK $11B 10Y TIPS

reopening auction. 

- Morning more active: Tsys began NY higher, flatter after o/night range after

Tokyo saw  good buying by Jpn bsnks, insurers and asset mgrs and Asian central

banks and light sales; mixed flows in UK. 

- Early NY gain on futures buys 21,797 bought in TYZ 10y at 8:16 am ET and 5,050

buy at 8:18am ET; cross-mkt aid w/ Bunds. Firm data: -23K initial wkly jobless

claims, 23.8 Sep Phil Fed biz activity index. Mild profit-tkg on flatteners. 

- FX-tied black box buying in Tsys as US$ receded vs yen as Pres. Trump cited

more N.Korea sanctions, seems gathering more countries' support. FX-tied buys

later reversed as US$ gained. Pre-auction shorts into TIPs auction.

- Midmorning 10Y futures sales: 10K sold about 10:04am ET, 3,500 Sep 10Y Ultra

sold 10:11am ET. 

- TIPS 10Y reopening tailed to 0.450%; but strong 70.4% indirect, mild 2.32%

directs, moderate 27.3% dealers; R/O profit. 

- TSY 3PM ET: 2Y 1.443%, 3Y 1.596%, 5Y 1.888%, 7Y 2.116%, 10Y 2.278%, 30Y 2.809%

US TSY FUTURES CLOSE: Steady to mixed by the bell, curve flatter w/long end

trading firmer but off early highs. Current futures levels: 

* Dec Ultra bonds up 18/32 at 166-23 (166-05L/167-12H) 

* Dec 30-yr Bond futures up 9/32 at 154-01 (153-21L/154-17H) 

* Dec 10-yr futures up 1.5/32 at 125-21.5 (125-19L/125-29H) 

* Dec 5-yr futures steady at 117-20.75 (117-19.75L/117-24.5H) 

* Dec 2-yr futures down .25/32 at 107-28.25 (107-28L/107-29.25H)

US EURODLR FUTURES CLOSE: Reversing early gains, mkt trading mildly lower after

the bell, long end of strip outperforming. Rate hike probability for Dec 13 FOMC

up to 71.6%. Current White pack (Dec'17-Sep'18): 

* Dec'17 -0.010 at 98.495 

* Mar'18 -0.010 at 98.400 

* Jun'18 -0.010 at 98.315 

* Sep'18 -0.000 at 98.245 

* Red pack (Dec'18-Sep'19) -0.010-0.015 

* Green pack (Dec'19-Sep'20) -0.010 

* Blue pack (Dec'20-Sep'21) -0.005 

* Gold pack (Dec'21-Sep'22) steady

US SWAPS: Spds running wider, belly lagging wings with the short end reversing

early narrows, joining long end late. Flow two-way in the short end on net,

modest deal-tied flow in the mix. Accts have been sporadically fading the

flattening in Tsy curve, scaling into the curve trade w/better front end

receiving since the FOMC annc. Swap desks expect corporate issuance to start

picking up as well, typically a narrowing factor for spds but overnight repo

specials in 2s-10s has buffered compression for several sessions. Fast$, props

and insurance portfolios accts starting to get active. OTC vol lower across the

surface, reversing early gains. Latest spread levels: 

* 2Y +0.88/27.19 

* 5Y +0.25/8.50 

* 10Y +0.19/-3.19 

* 30Y +0.88/-31.38

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

- Sep 22 SF Fed Williams: SNB Rsrch Conf Zurich, Switzerland Q/A 0600ET

- Sep 22 KC Fed George: Fed Oil Supply/Demnd Conf Okl.Cty Q/A 0930ET

- Sep 22 Sep Markit Mfg Index (flash) (52.8, --) 0945ET

- Sep 22 Sep Markit Services Index (flash) (56.0, --) 0945ET

- Sep 22 Sep Atlanta Fed inflation (1.9%, --) 1000ET

- Sep 22 Q3 St. Louis Fed Real GDP Nowcast (2.60%, --) 1100ET

- Sep 22 Q3 NY Fed GDP Nowcast (+1.3%, --) 1115ET

- Sep 22 Dall Fed Kaplan: Fed Oil Supply/Dmnd Conf Okl.City Q/A 1330ET

- Sep 22 Sep Treasury Allotments (p) 1500ET

Eurodollar/Treasury option summary

Eurodollar options, Sep options expire

Blocks:

0707-0731ET, more on screen

-20k EDZ 85p, 2.0 vs. 98.50/0.50%

0815ET, more in pit/on screen

-10k EDZ 83/86c spds, 12.5 vs. 98.51/0.74%

0834ET

10k E2Z 77/82 R/R, 0.0+c vs. 97.995/0.36%

Pit/screen:

-40k EDZ 83/86c spds, 12.5, also Blocked

-25k EDV 85p, 2.0, also Blocked

+25k EDU 76/EDZ'18 73p strip, 2.0

20k EDZ 86c, 1.5-1.0

-20k EDZ 82/85p spds, 4.75 vs.

+20k EDZ 85/87c spds, 4.75 vs. 98.50/0.95%

-15k EDX/EDZ 85/86c spd spds, 0.75

-10k EDV 85p, 2.0 vs. 98.50/0.50%

9k EDZ 86/87c spds, 1.25

+5k EDX 86c, 0.5

+5k EDZ 85p, 5.0 vs. 98.51/0.10%

5k EDH 82/83 2x1p spds, 1.5

2.5k EDM 81/82 3x2p spds

13k EOH 80/82 1x2c spds

12k EOZ 81/82p spds, 6.5

-10k EOZ 81p vs. 5k E3Z 77p, 4.5cr

10k EOZ 78/81p spds vs.

E2Z 77/80p spds

8.6k EOZ 83/85/86c flys

8k EOF 78/81 2x1p spds

6k EOZ 80/81p spds, 4.0

3.25k EOH 77/78/80p trees

2k EOF 77/78/80/81p condors, 3.5

2k EOZ 85/86c spds, 0.5

2k EOX 81p vs. E3X 77p, 1.5

-2k EOX 81 w/E2X 80 straddle strip, 31.0

+40k E2Z 87c, 0.50

5k E2Z 86/87p strip, 1.5

+4k E2X 82c, 1.5 vs. 97.97/0.10%

3.25k E2Z 85/86c spds

Tsy options, October expires Friday

+/-2.3k TYV 125+ combo, closer

1.5k TYX 125+ straddles, 110

1k TYX 126c, 29 vs. 125-23.5

+14k FVX 119+c, 1.5

-5k FVX 117/118.2 R/R, .5c ovr

3.3k USX 150/158 strangles, 29-30 vs.

USZ 147/161 strangles, 26 

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

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