US TSYS RISE: SAFE-HAVEN BID ON US/N.KOREA,GERMAN VOTE,MIDEAST

     US TSYS SUMMARY: Treasuries end around Mon price highs on safe-haven buying

as NKorea foreign minister said it cld potentially fire even if US airplanes

technically were not in NKorea airspace; NKorea said US Pres. Trump weekend

comments were "act of war"; US disputes. China said US-NK issue getting "too

dangerous" (Reuters). 

- Tsys began NY higher, flatter as overnight rally picked up 4am ET as Tsys

tracked EGBS upward after German election results, FTQ on Mideast. Tsys

technical buying as 10Y cash note and 10Y Tsy futures broke upside pivot levels,

bullish development that brought in technical buying. - Black boxes did FX-tied

Tsys buys as US$ receded vs. Jpn yen. Tsys rose amid firmer EGBS and UK Gilts

tho brief profit-tkg then rose again. Mideast concerns aided EGBs and Gilts amid

Turkey/Iraq/Iran political jitters. 

- Tsys TYZ 10Y futures saw 160,000 bought from 125-29.5 to 126-03. Tsys saw some

real$ and fast$ sellers at the highs; gold surged but then had recently pared

gains. Dec rate hike probability now 61.6%% (MNI PINCH) after previously

breached 70%. 

- TSYS 3PM ET: 2Y 1.423%, 3Y 1.559%, 5Y 1.838%, 7Y 2.060%, 10Y 2.220%, 30Y

2.760%

US TSY FUTURES CLOSE: Safe-haven/risk-off Monday roundup following N-Korea

foreign minister headline re: US Pres Trump weekend comments are declaration of

war. Tsy futures made new session highs into midday drew real- and fast$ sellers

on highs, US$ continues to slide vs. Yen (111.61), gold surged $11.60 to 1309.0.

Current futures levels: 

* Dec Ultra bonds up 1-4/32 at 168-01 (166-29L/168-09H) 

* Dec 30-yr Bond futures up 27/32 at 154-30 (154-02L/155-04H) 

* Dec 10-yr futures up 11/32 at 126-02.5 (125-23L/126-04.5H) 

* Dec 5-yr futures up 6/32 at 117-28.25 (117-21.25L/117-29.5H) 

* Dec 2-yr futures up 1.5/32 at 107-30 (107-28L/107-30.5H)

US SWAPS: Quiet start to the week w/spds running mildly tighter across the

curve, holding to narrow range all day on light two-way flow in 7s-8s, some

deal-tied flow in 3s early. OTC vol did climb higher as Tsys surged on renewed

safe-haven bid tied to N-Korea tensions. Latest spread levels: 

* 2Y -0.12/25.75 

* 5Y -0.12/8.56 

* 10Y -0.19/-3.44 

* 30Y -0.62/-31.50

US EURODLR FUTURES CLOSE: Higher across the strip, near session highs with long

end outperforming. Dec Fed rate hike probability falls to 61.2% from just over

70% late last week. Current White pack (Dec'17-Sep'18): 

* Dec'17 +0.015 at 98.520 

* Mar'18 +0.015 at 98.420 

* Jun'18 +0.015 at 98.330 

* Sep'18 +0.025 at 98.270 

* Red pack (Dec'18-Sep'19) +0.030-0.040 

* Green pack (Dec'19-Sep'20) +0.040-0.050 

* Blue pack (Dec'20-Sep'21) +0.050-0.055 

* Gold pack (Dec'21-Sep'22) +0.055-0.060

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

- Sep 26 Sep Philadelphia Fed Nonmfg Index (31.8, --) 0830ET

- Sep 26 23-Sep Redbook retail sales m/m (+0.1%, --) 0855ET

- Sep 26 Jul Case-Shiller Home Price Index (+0.7, --) 0900ET

- Sep 26 Clvld Fed Mester: Global Outlook: NABE Ann Mtg Clvld Q&A 0930ET

- Sep 26 Chi Fed Evans welcome remarks, Payments Symposium, Chicago 0930ET

- Sep 26 Aug new home sales (571K, 581K) 1000ET

- Sep 26 Sep Richmond Fed Mfg Index (14, --) 1000ET

- Sep 26 Sep Conference Board confidence (122.9, 120.0) 1000ET

- Sep 26 Sep Dallas Fed services index (15.1, --) 1030ET

- Sep 26 Fed Gov Brainard: Fed Brd Conf/Labor Disparities Wash DC 1030ET

- Sep 26 Atl Fed Bostic: Econ outlk/Mon policy Atlanta Press Club Q/A 1230ET

- Sep 26 Fed Chr Yellen keynote address NABE Annual Mtg Cleveland Q/A 1245ET

- Sep 26 US Tsy $26.0B 2-Year Notes auction 1300ET

Eurodollar/Treasury option summary

Eurodollar options,

Blocks:

0514-526ET

+10k EDU 77p, 1.5

0633ET

+25k EDM 81/82p spds, 4.0 vs. 98.325/0.08%

Pit/Screen:

-50k EDZ 86c, 1.25 vs. 98.51/0.35%

+33.8k EDM 85/86 1x2

25k EDX 83p, cab

+15k EDZ 86/87c spds, 1.25

5k EDH 85/86c spds vs.

EDH 81/82p spds, 1.25

+4.25k EDV/EDZ 85/86c spd spds, 2.0

1.75k EDZ 85/86/87 1x3x2c spds, 1.75

4.5k EOX 78/80p spds, 1.0 vs. 98.16/0.10%

-3k EOZ 81/85c spds vs.

+E3Z 77/81c spds, 6.0db, flattener

+2k EOZ 82/83 1x2c spds, 1.0 vs. 98.115/0.10%

2k EOH 80/83c spds vs. E2H 80c, 0.0

2k EOZ /E2Z 85c spd, 0.0

+7k E2Z 83c, 2.0

+4k E2Z 85c, 1.5 vs. 98.06/0.15%

Tsy options

Block:

0922ET

7.5k USZ 142p, 3

Pit/screen:

+6.7k TYX 127/128/129c flys, 5

2.5k TYX 127c, 15 vs. 125-31

2k TYX 126+c, 32

2k TYX 126c, 30

+1k FVZ 118 straddles, 58

13.5k TUZ 107.5/107.6p spds, 1

+5k TUX 108.2c, 1.5

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

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