*** 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

levels:

* 2Y  -0.25/20.25

* 5Y  +1.19/7.31

* 10Y +2.50/+3.81

* 30Y +3.50/-12.75