BMO analyst Ian Lyngen said the....>

US TSYS/RESEARCH: BMO analyst Ian Lyngen said the US Treasury market's "reaction

to the strong PPI number was in line with what one might have expected as a

knee-jerk selloff ensued with 2s and 3s leading the move to higher yields. But,

the somewhat tenuous relation between stronger-than-expected PPI and the CPI

print on Wednesday led to a reassessment of its impact on the Fed."

- "In any case, equity market drops were in the driver's seat with crude and

gasoline showing near 3% declines," Lyngen said. "No single factor was

singularly responsible for the early risk selloff, although energy markets

appeared to lead the move. We're encouraged by the strong price action despite

ostensibly bond-bearish data."