US TSYS PRICES END MIXED; FLATTENING AS FED EYED

     US TSYS SUMMARY: Treasuries ended Tues mixed, flatter after morning slide

on technical selling, firmer US$/yen and black box sales in Tsy intermediates,

then later dip buying and consolidation, and 5/30Y flattening too. 

- Tsys saw long liquidations in futures, while shorts in front end, long end.

Tsy 10Y briefly broke 200-day 2.3127% mov avg. 

- Tsys saw 8:31am ET sale: 9,600 FVZ 5Y Tsy futures at 117-10.5. Then Eurodlr

futures sale of 35,000 EDZ7 before 8:44am ET, then 45,000 Tsy 10Y futures

contracts sold from 125-10 to 125-07.5 before 8:55am. 

- Tsy 10Y futures had 9:49 am ET apparent sale of 5,000 TYZ at 125-10. Mkt had

"mixed bag" of bearish things. Tsys saw dip buying, corp-tied buying late

morning. 

- Front end hurt by Fed chr talk: hawkish ones spur heavier front end sales. Fed

Chr Yellen meet Thu with Trump. Talk potential Taylor choice hurt Tsys Mon, Tue.

- Apparent sale 11:46am of 5K 5Y futures FVZ, 117-10.25, cross on bid. Rate pays

in 2Y, 3Y, 10s.

- Tsys 3pm ET: 2Y 1.550%, 3Y 1.6807%, 5Y 1.958%, 7Y 2.154%, 10Y 2.300%, 30Y

2.803%

US TSY FUTURES CLOSE: Trading steady/mixed into the close, spd curve flatter

with long end outperforming, Bond little off highs after making new session lows

in first half. Current futures levels: 

* Dec Ultra bonds up 15/32 at 166-24 (165-19L/166-30H) 

* Dec 30-yr Bond futures up 9/32 at 154-00 (153-10L/154-03H) 

* Dec 10-yr futures steady at 125-13.5 (125-07L/125-16.5H) 

* Dec 5-yr futures down .5/32 at 117-10.5 (117-07.75L/117-13.5H) 

* Dec 2-yr futures down .5/32 at 107-22.25 (107-21.5L/107-23.25H)

US EURODLR FUTURES CLOSE: Trading steady in the short end to mildly lower out

the strip, off earlier lows to middle of range. Lighter volume than the week

opener though Red Dec8 leads w/near 350k by the bell. Current White pack

(Dec'17-Sep'18): 

* Dec'17 +0.000 at 98.495 

* Mar'18 +0.005 at 98.355 

* Jun'18 +0.005 at 98.240 

* Sep'18 +0.000 at 98.150 

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

* Green pack (Dec'19-Sep'20) -0.010-0.015 

* Blue pack (Dec'20-Sep'21) -0.010 

* Gold pack (Dec'21-Sep'22) -0.010-0.005

US SWAPS: Spds running wider, spd curve steeper with long end leading move wider

by late morning. Late short end receiver ($240M 3Y at 1.9125%) after earlier

paying in 2s, 3s and 10s. Mild deal-tied flow and flattener unwinds in the mix.

OTC vol weaker across the surface, heavy exchange traded put volume, better

buying front and 1Y midcurve Dec expirys. Latest spread levels: 

* 2Y +0.19/25.56 

* 5Y +0.06/8.56 

* 10Y +0.75/-2.06 

* 30Y +1.19/-29.75

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

- Oct 18 NY Fed VP Hirtle on regul'n: EU Bk Conf Berlin Q/A 0530ET

- Oct 18 13-Oct MBA Mortgage Applications (-2.1%, --) 0700ET

- Oct 18 NY Fed Dudley/Dall Fed Kaplan talk NY-Tex ties, NY; Q/A 0800ET

- Oct 18 Sep housing starts (1.180M, 1.170M) 0830ET

- Oct 18 Sep building permits (1.272M, 1.245M) 0830ET

- Oct 18 Oct Atlanta Fed inflation (1.9%, --) 1000ET

- Oct 18 13-Oct crude oil stocks ex. SPR w/w 1030ET

- Oct 18 Fed releases Beige Book for upcoming FOMC meeting DC 1400ET

Eurodollar/Treasury option summary

Eurodollar options,

* -5,000 Dec 83/86 2x1 strangles, 1.75

* 5,000 Jan 83/86 call spds, 3.75 vs. 98.345/0.36%

* +5,000 short Dec 81/82 1x2 call spds, 0.75

* 2,000 Green Jan 78/Blue Jan 77 straddle strip, 52.5

* +15,000 Sep 76/Red Dec 73 put strip, 3.5

* +15,000 Dec 85 call/short Nov 78 put calendar strangle, 3.75

* +10,000 Dec 83/85/86 put flys, 5.5

* +10,000 Dec 85 calls, 3.75

* +8,000 Red Dec'18 75/77/80 put trees, 6.0

* +20,000 Green Dec 75 puts, 1.5

* -6,000 Green Dec 77/78/80/82 put condors, 18.0

* -4,000 Green Jan 77/80 strangles, 15.0

* -3,000 Green Dec 76/77/78 put flys, 2.0

* +20,000 Blue Dec 75 puts, 3.5 vs. 97.74/0.10%

* 5,000 short Dec 80 puts, 5.5 vs. 98.065/0.38%

* 1,750 short Jun/Green Jun 80 call spds, 2.0

* Block 10,000 Green Nov 77 puts, 3.0, crossed on the bid

* 5,000 Red Mar 76/78 2x1 put spds, 0.5

* 5,000 Blue Dec 73/76 put spds, 4.5 vs. 97.765/0.10%, (earlier, macro fund sold

25k Blue Jun 73/76 put spds at 9.5 covered, adding to some 85k sold earlier in

Oct. at same level)

* -25,000 Blue Jun 73/76 put spds, 9.5 vs. 97.645/0.15%, adding to some 85k sold

earlier in month at same level

* +105,400 short Dec 78 puts, 2.0 last few minutes, adding to late Mon flow

(+215k total volume [40k on screen/175k pit]).

* Block 2,500 short Jan 77/78 5x4 put spds, 8.5 adding to earlier screen volume

(38.5k vs. 30k)

* Block +5,000 short Dec 78/80 put spds, 3.0 at 0549ET

##########################################

US Tsy options

* 3,500 FVF 116/118 put over risk reversals, 0.0 vs. 116-31.5/0.44%

* 3,700 TYZ 123.5/124 put spds, 4/64

* 1,000 FVX 117.75 calls, 2.5/64

* 2,000 FVX 117 puts, 5/64 vs. 117-09/0.26%

* +9,500 TYX 124 puts, 2/64, takes it bid

* 13,700 TYX 127 calls, 2/64 on screen

* 2,000 TYZ 124.5/125/125.5 put trees, 1/64

* 1,000 TYZ 1255 straddles, 1-12/64

* 1,600 wk2 TY 127.2/128 1x2 call spds, 0.0

* 1,000 FVF 116.5 puts, 14.5/64

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

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