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*** Long end spds gapped wider in the......>

US SWAPS: *** Long end spds gapped wider in the first half, spd curve steepening
sharply as the 30Y spd climbed to least inverted levels since March 2015 (30Y
spd +3.5 to -12.75 high). Swap sources said move related to chatter that the Fed
is nearing final proposals to soften bank leverage ratio rules, softening Basel
capital requirements to give banks more freedom. Speaking at an American Bar
Assn conf Fri afternoon, VC for supervision Fed Board of Gov's Randy Quarles
touched on just that: easing bank regs, leverage ratios, bye bye Basel? Not yet,
but door is cracked open -- long end swap spds held near earlier wides. Aside
from two-way flow in the short end, and deal-tied paying ahead expected supply
next week, sources note some receiver unwinds out the curve with specs putting
on tactical wideners to get ahead of further dis-inversion. Latest spread
* 2Y  -0.25/20.25
* 5Y  +1.19/7.31
* 10Y +2.50/+3.81
* 30Y +3.50/-12.75

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