*** Choppy day for markets, Tsys....>

US TSYS SUMMARY: *** Choppy day for markets, Tsys lower/off lows after trading

higher early -- as are equities. Fed chair Powell's inaugural semi-annual

Mon/Pol testimony head-fake as rates bounced on document release, mkt was

leaning more towards hawkish or discounting dovish statement. 

- Early opinion of Powell as Yellen 2.0, w/eye toward cautious policy tightening

as inflation remains slow to rebound, suggesting economy soft-patch. No hurry

here (but short end remains anchored -- March hike a go). On bounce, sources

noted fast$, prop buying on lows. Note, swap curve continues to flatten, short

end gapping wider following another higher 3M LIBOR set (+0.0220 to 2.0062%,

+0.0500/wk) LOIS widening as well.

- Hawkish Q&A bore out original opinion, however, w/Powell saying incoming data

suggests strengthening economy, confident "inflation getting stronger". Rates

reversed bounce, made new session lows, better real$ and bank selling long end,

fast$ and props buying lows. Heavy futures volume ahead June taking top step Wed

- Late ylds: 2Y 2.262%, 3Y 2.423%, 5Y 2.664%, 7Y 2.832%, 10Y 2.899%, 30Y 3.166%