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Deceptively quiet session/limited...>

US TSYS SUMMARY
US TSYS SUMMARY: Deceptively quiet session/limited dat w/housing #s strong,
curves surge steeper late (2s10s +2.702, 52.165; 2s30s +4.251, 70.544; 5s30
+3.221, 35.323). Tsy 10Y yld broke 3% earlier/rejected move but is back over
2.99% after the bell, potentially spurring additional selling in 30Y bond,
weaker hands unwinding flatteners.
- US$ index reversed early gains (DXY -.180, 90.766 vs. 91.076H; US$ vs. Yen at
108.7 after climbing to 109.2 earlier -- spurred FX-acct selling in Tsys.
Equities cratered later in the second half (emini -46.75, 2624.5), had started
w/heavy selling in FANG shares followed by Caterpillar (CAT) reversing strong
gains to trade >4% lower. Sources pointed ot Apple, 3M, Travelers and CAT made
up appr 260pt of Dow decline.
- $32B 2Y note auction, small .3 tail after 2Y awarded a 2.498% rate (2.310%
previous) w/bid/cover 2.61 vs. 2.91 previous (2.85 avg).
- Heavy option volume, w/upside calls making lions share (+100k each EDM 81
calls, E2M 78 Eurodollar calls; +20k TYN 126.5 calls, 1/64).
- Late ylds: 2Y 2.466%, 3Y 2.625%, 5Y 2.819%, 7Y 2.946%, 10Y 2.992%, 30Y 3.176%

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