US TSYS: US/CHINA TRADE TALKS TO RESUME

US TSY SUMMARY: Tsys trading lower into the bell as equities rebound, volume

(TYU 1.15M), curves flatter; Data this morning came in mixed as Initial

unemployment claims were below expectations in the Aug 11 wk, but claims were

revised up to 214k in the August 4 wk; July housing starts +0.9% to 1.168m SAAR,

below the 1.270m exp, revisions for Jun and May came in mixed; Philly Fed MFG

came in much weaker than expected +11.9 vs +22.0 exp, +25.7 Last;

-Overnight China headlines spilled into US trade with US Tsy futures trading

lower throughout the session, "*U.S.-CHINA TRADE TALKS ARE SAID TO BE SCHEDULED

AUG. 21-22: DJ-BFW"; 

-Headline this afternoon, "*MNUCHIN SAYS U.S. PREPARING MORE TURKEY SANCTIONS

OVER PASTOR"-BFW; US$ climbed higher on the headline but remains slightly down

on the session, DXY (-.057, 96.639, 96.765H/96.316L); 

-Equities much stronger today (emini +24.50, 2,845.75), US$/Yen reversing higher

(JPY +0.16, 110.90); West Texas Crude higher (WTI +0.45, 65.46); Gold fell at

the end of the session (XAU -0.80, 1174.08); Tsy cash/ylds: 2Y 100-00 (2.620%),

5Y 100-00 (2.748%), 10Y 100-00.5 (2.871%), 30Y 99-13.5 (3.029%).

US TSY FUTURES CLOSE: Trading slightly lower as equities remain higher (emini

+25.25, 2,846.50), light volume (TYU 1.13M), Curves flatter,; update:

* 2s10s -0.150, 24.856 (24.364L/25.967H);

* 2s30s -1.234, 40.725 (40.725L/42.661H);

* 5s30s -1.526, 28.034 (28.034L/29.746H);

Current futures levels:

* Sep Ultra bonds futures down 07/32 at 158-14 (157-27L/158-22H)

* Sep 30-yr Bond futures down 07/32 at 144-17 (144-05L/144-23H)

* Sep 10-yr futures down 06/32 at 120-08 (120-3.5L/120-13H)

* Sep 5-yr futures down 04/32 at 113-19 (113-16.5L/113-22.25H)

* Sep 2-yr futures down 01.5/32 at 105-25.5 (105-25L/105-26.75H)

US EURODOLLAR FUTURES CLOSE: Trading lower in the middle of a tight range on

mild volume. Current White pack (Sep'18-Jun'19):

* Sep'18 -0.0150 at 97.6275

* Dec'18 -0.020 at 97.375

* Jun'19 -0.025 at 97.230

* Jun'19 -0.030 at 97.125

* Red pack (Sep'19-Jun'20) -0.035

* Green pack (Sep'20-Jun'21) -0.040-0.030

* Blue pack (Sep'21-Jun'21) -0.035-0.030

* Gold pack (Sep'22-Jun'22) -0.030-0.025

TECHNICALS: 

US DOLLAR LIBOR: Latest settles,

* O/N +0.0062 to 1.9200% (+0.0075/wk)

* 1 Month +0.0174 to 2.0774% (+0.0106/wk)

* 3 Month +0.0105 to 2.3223% (+0.0030/wk)

* 6 Month +0.0029 to 2.5135% (+0.0014/wk)

* 1 Year +0.0017 to 2.8166% (+0.0011/wk)

US TSYS: *** /REPO REFERENCE RATES: (rate, volume)

* Secured Overnight Financing Rate (SOFR): 1.98% vs. 1.93% prior, $807B

* Broad General Collateral Rate (BGCR): 1.97% vs. 1.91% prior, $417B

* Tri-Party General Collateral Rate (TGCR): 1.97% vs. 1.91% prior, $399B

US SWAPS: Latest spd levels:

* 2Y +1.13/20.38

* 5Y +0.63/14.25

* 10Y +0.43/6.93

* 30Y +0.48/-6.78

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

- Aug 17 *** Aug Michigan sentiment index (p) 97.9 98.4  1000ET

- Aug 17 * Q2 e-commerce retail sales -- -- %  1000ET

- Aug 17 * Q2 Advance NSA Service Revenue -1.2 -- %  1000ET

- Aug 17 ** Jul leading indicators 0.5 0.4 %  1000ET

- Aug 17 * Jul BLS state payrolls 215.3 -- k  1000ET

- Aug 17 ** Q3 St. Louis Fed Real GDP Nowcast -- -- %  1100ET

- Aug 17 ** Q3 NY Fed GDP Nowcast -- -- %  1115ET

Eurodollar/Treasury Option Summary

Eurodollar options, Pit/screen:

* -15,000 Short Sep 70 puts at 3 vs 9706/0.30%

* 10,000 Sep 77 calls at 0.25

* 8,500 Green Sep 68/73 puts over risk reversal at 2 vs 9699.5/0.22%

* +10,000 Red Sep 67/70 put sprd at 5

* 23,500 Dec 73/75 put sprd at 8 vs 9739/0.23%

* 10,000 Short Sep 68 puts at 1 vs 9705/0.10%

* -5,000 Short Sep 70 puts at 2.5 vs 9708/0.30%

* 5,000 Green Dec 66/67/68 put tree at 0.5

* -8,300 Short Dec 75 calls vs 9701.5/0.12% with Mar 73 calls vs 9724/0.33% for

net 10

* +7,500 Blue Dec 65/68 put sprd at 6.5 vs 9706/0.22%

* +5,000 Dec 72/73 put sprd for 1.5 over Dec 75 calls

* -3,000 Sep 75/76 1x2 call sprd at 8 vs 9764/0.12%

* 5,000 Dec 71/72 1x2 put sprd for 1.25

     US TSY OPTIONS

US TSY OPTIONS: Latest trade,

* 3,968 WNU, 158-06 BLOCKED

* 5,000 TYZ 119 Puts at 31, 120-06

* -2,000 FVV 113.25/133.5 Strangle at 35

* +1,000 USU 145 Calls at 38 vs 20's

* +2,700 USX 140 puts bought 30-31

* +3,000 TYU 120.5 calls at 11, futs 9.5-10

* -3,000 USU 145/146 call sprd at 14, futs 16/17

--MNI Chicago Bureau; +1 630-698-0154; email: ryan.martin@marketnews.com

[TOPICS: MTABLE,M$U$$$,M$$FI$,MN$FI$,MN$FX$]