US TSYS SLID: SENATE PANEL VOTES 12-11 TO APPROVE GOP TAX BILL

     US TSYS SUMMARY: Treasuries slid late Tuesday as Sen Budget panel voted

12-11 to send on a tax reform bill to the full Senate; the Sen Committee

advanced a GOP tax bill on a party-line vote (Bloomberg.) 

- Tsys had a choppy afternoon: declined on soft $28B 7Y auction, then rose on

news that N.Korea fired a missile, then zigzagged after that. 

- Tsys had post-auction redistribution sales on soft $28B 7Y auction: 2.230%

rate, fairly light 58.6% indirects, in-range 13.74% directs, leaving large 27.7%

for dealers to mop up. 

- Earlier, the Tsys hit session high price around noon ET, after bull

steepening, heavy futures volume (2.42Mln contracts), ongoing Dec/Mar roll

activity. Senate confirmation hearing for Fed Chr nominee Powell proceeded

smoothly; said case for Dec raising rates coming together. 

- Hse Minority Leader Pelosi & Sen Min Leader Schumer skipped legislative

leaders' mtg with US Pres. Trump to avert debt limit expiration/govt shutdown as

peeved on Trump comment. Early 2way flows, little react to 2nd tier data. 

- TSYS 3PM: 2y 1.758%, 3Y 1.848%, 5Y 2.066%, 7Y 2.230%, 10Y 2.337%, 30Y 2.763%,

US TSY FUTURES CLOSE: Trades mostly lower by the bell, choppy late session trade

on various factors (N Korea missile launches, Brexit divorce bill chatter, tax

reform bill -- latter spurring sell-off). Current futures levels: 

* Dec Ultra bonds steady at 167-22 (167-08L/168-09H) 

* Dec 30-yr Bond futures down 1/32 at 154-1 (154-02L/154-27H) 

* Dec 10-yr futures down 5/32 at 124-31 (125-00.5L/125-07.5H) 

* Dec 5-yr futures down 2.5/32 at 116-29.25 (116-28.75L/117-02H) 

* Dec 2-yr futures down 1/32 at 107-14.25 (107-14.25L/107-16H)

US TSY FUTURES: Late roll volume update -- more heavy volume ahead Thursday's

first notice date (March futures go "top step"). December future's staggered

expiration on December 19 for 10s, 30s and Ultras, and December 29 for 2s and

5s. Latest volume: 

* TUZ/TUH appr 670.9k from 5.25 to 6.0; 

* FVZ/FVH appr 1.28M from 5.5 to 6.25; 

* TYZ/TYH appr 1.20M from 7.25 to 7.75; * USZ/USH appr 244.0k from 1-02.5 to

1-03.5; 

* WNZ/WNH appr 248.7k from 28.5 to 29.25;

US EURODLR FUTURES CLOSE: Trading mostly lower by the bell, at/near modest

late-session lows w/rates slipping Senate budget panel advances the Republican

tax bill on "party-line vote," Bbg. Current White pack (Dec'17-Sep'18): 

* Dec'17 +0.005 at 98.452 

* Mar'18 +0.005 at 98.285 

* Jun'18 -0.005 at 98.130 

* Sep'18 -0.010 at 98.040 

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

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

* Blue pack (Dec'20-Sep'21) -0.015 

* Gold pack (Dec'21-Sep'22) -0.015

US SWAPS: Spds running mixed by the bell, spd curve steeper but off second half

highs as front end pared back narrowing, two-way flow in belly on day, light

rate paying long end, better receiver in short end late morning followed by

unwinds in last hour. OTC vol mixed, off midday lows. Latest spread levels: 

* 2Y -0.62/16.19 

* 5Y -0.69/6.50 

* 10Y +0.06/-0.69 

* 30Y +0.38/-23.12

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

- Nov 29 24-Nov MBA Mortgage Applications (0.1%, --) 0700ET

- Nov 29 Q3 GDP (2nd) (3.0%, 3.4%) 0830ET

- Nov 29 Q3 GDP Price Index (2.2%, 2.2%) 0830ET

- Nov 29 NY Fed Dudley: Rutgers Fireside Chat,New Brunswick, NJ Q/A 0830ET

- Nov 29 Oct NAR pending home sales index (106.0, --) 1000ET

- Nov 29 Fed Chr Yellen Testifies Econ Outlk: Joint Econ Comm; DC 1000ET

- Nov 29 24-Nov crude oil stocks ex. SPR w/w 1030ET

- Nov 29 SF Williams at 54th Ann Econ Forecast, ASU Phoenix Q/A 1350ET

- Nov 29 Fed Reserve releases Beige Book for upcoming FOMC mtg, DC 1400ET

- MNI: FED'S POWELL: BAL SHEET ROLLOFF LIKELY 3-4 YRS TO $2.5 TLN -$3.0 TLN 

- POWELL: CASE FOR RAISING RATES IN DEC COMING TOGETHER

- POWELL: EXPECT GRADUAL RATE INCREASES TO CONTINUE

- POWELL: MAX EMPL IMPRECISE, BUT 4.1% UNEMPL AROUND NAT RATE

- POWELL: IMPOSSIBLE TO MODEL TAX REFORM PROPOSAL, LACK DETAILS

- POWELL: NO TALK WITH TRUMP ADMIN SO FAR TO CAUSE CONCERN

- POWELL: STRONGLY COMMITTED TO INDEPENDENT FED

- POWELL: INFL SHORTFALL COULD BE DUE TO IDIOSYNCRATIC FACTORS

- POWELL: INFL COMING IN WEAK THIS YR WAS SURPRISE

- POWELL: SOME TAX POLICIES CAN SPUR INVESTMENT

- POWELL: LABOR FORCE, PRODUCTIVITY POLICIES BOOST GROWTH

Eurodollar/Treasury Option Summary:

Eurodollar options

Pit/screen:

Block, 1330:40ET,

* +36,951 Red Dec 77/78 put spds, 4.5 (hear over 15k offered at 4.25 in pit

before Block)

* +8,000 short Dec 80/81 1x2 call spds, 2.0 vs.97.99/0.08%

* 5,000 Jun 78/80 2x1 put spds, 1.5 vs. 98.165/0.05%

* 10,000 Green Jun 73/76 put spds, 6.0 vs. 97.80/0.17%

* +7,500 Green Dec 80/81 call spds, 0.5

* -3,000 Dec 85 straddles, 5.75

* +8,000 long Green Sep 82/85 call strips, 31.0 vs. 97.66/0.54%

* -5,000 short Mar 78/80 1x2 call spds, 1.5, 2-leg over

* +5,000 Red Jun 78/81 1x2 call spds, 2.5, 2-leg over

* +8,500 Red Jun 78/81 1x2 call spds, 2.5

* 10,000 Green Dec 77 puts, 2.0 vs. 97.82/0.10%

* 10,000 short Dec 80 puts, 4.0 vs. 98.015/0.10%

* 2,000 short Jun 78/Blue Jun 76 straddle spds, 8.5

* 4,000 Red Dec 77/80 2x1 put spds, 3.0 vs. 97.97

* 7,500 Green Dec 75/76/77 2x1x1 put flys, 2.0

* 6,000 short Dec 80 puts, 4.5

* +5,000 short Mar 80 puts, 13.0

* -1,000 Blue Dec 77 straddles, 10.5

Block, 0727:34ET,

* +7,000 Jun 75 puts, cab

Block, 0656:00ET,

* +5,000 short Mar 77 puts, 3.0, crossed on the bid

Tsy options

Pit/screen:

* +15,000 FVH 113.25 puts, 1.5/64

* +4,000 TYH 125 straddles, 1-47/64 and bid

* 1,000 TYF 126/126.5 call spds, 4/64 vs. 125-03

* 1,300 TYF 124.5/TYH 123 put spds, even

* +2,500 TYH 123/123.5 put strips, 36/64 earlier

* Update, over +50,000 TYH 123 puts, 15/64 on day

* -1,000 TYF 125 straddles, 54/64

* 1,000 TYH 123/127 call over risk reversals, 2/64 vs. 125-00/0.32%

* 1,000 TYH 123/127 call over risk reversals, 2/64

* 800 TYH 122.5/124 3x2 put spds, 30/64 vs.

* 800 TYH 123/124.5 3x2 put spds, 40/64

* 1,000 wk1 TY 124.5 puts, 3/64

* 1,000 wk2 TY 124 puts, 3/64

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

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