BMO analyst Ian Lyngen said the....>

US TSYS/RESEARCH: BMO analyst Ian Lyngen said the "bullish tone of the Treasury

market remained intact, despite a relatively soft 10-year auction that came

close to the low yields of the day and tailed 1.6 bps. The muted post-auction

price action speaks to bullishness as an underlying theme although investor

demand at the event was the lowest since December." 

- He adds that "for now, with bellicose rhetoric being traded between the US and

North Korea, there's little to get in the way of the underlying bid and the

market traded well into the close, albeit on falling volumes." Chicago Fed

President Evans "sounded dovish in his remarks today at roughly the same time as

the auction, helping sentiment and proving more meaningful than" St. Louis Fed

Bullard's "ongoing dovishness," he said. "Evans acknowledged the asymmetric

risks of undershooting inflation (versus overshooting), and suggested that soft

wages indicated slack-- consistent with our views, but refreshing to hear from

an FOMC member nonetheless."