Late Wednesday BNP Paribas recommended......>

US TSYS: Late Wednesday BNP Paribas recommended buying 10-Year Tsys at 2.05%

yield, targeting 1.75%. Writing that "with US (& global) data exp. to weaken

through the summer, little progress is anticipated on global trade & crucially

central bank easing ahead - imminent Fed rate cuts & end of balance sheet

normalization, ECB rate cuts & QE later this year - we add long US rates

exposure. The recent correction to higher rates with strong labor mkt data last

week provides a good local entry point. Further, positioning is likely to be

better balanced with cost of downside protection moderating from extreme levels.

- On the curve they like bull-steepeners, noting "as with prev. easing cycles,

we exp. the 1st Fed rate cut to fuel market exp. for a deeper easing cycle,

implying lower rates, a steeper curve & higher vol. We continue to exp. the

largest potential for a rally to be in the 1y1y segment & reiterate our favoured

9m1y receiver spread expression. 2s10s remains flat vs. the level of rates as it

continues to lag the steepening in longer segments at the long-end (10s30s). Our

favoured steepener exposures include: (i) 1y fwd 5s30s US steepener vs. EUR

flattener; (ii) paying 1y fwd, 2s10s30s swap fly; (iii) 1y fwd 2s10s curve cap"