A weaker-than-expected core CPI.....>

US TSYS SUMMARY: A weaker-than-expected core CPI print added modestly to the

case for Fed cuts, but ultimately had limited impact on Tsys Wednesday.

- The 2-Yr yield is down 4.3bps at 1.8867%, 5-Yr is down 3.6bps at 1.8791%,

10-Yr is down 1.6bps at 2.1274%, and 30-Yr is up 0.9bps at 2.6236%.

- Sep 10-Yr futures (TY) up 6/32 at 126-31.5 (L: 126-24 / H: 127-03).

- Day`s highlight was May CPI, headline M/M as expected +0.1%, but core missed

at +0.1%. Short end rallied (2Yr yld down 2bps) in the aftermath, but reversed.

Yields have since backed up a bit from immediate post-release levels.

- Tsy futures volume picked up on CPI release, but ultimately receded. Decent

volumes though compared with last couple of sessions, TY>1.3mln by 1500ET.

- 10Yr auction was uneventful: lowest yld since Nov 2016 but small tail (0.1bps)

and cover in line with recent averages (2.50x). Little reaction.

- Biggest flow of the day was a 5Yr/10Yr flattener, 42,508 FVU9 (Sep) at 117-182

vs 26,037 TYU9 (Sep) at 127-01. Curve went a little flatter.

- Fed blackout continues; Thursday sees jobless claims and May import prices.