### MARKETS DISCOUNTING TARIFF RHETORIC ....>

US TSYS: ### MARKETS DISCOUNTING TARIFF RHETORIC 

Metals import tariff blowback, US Pres Trump not backing down on intentions,

possibly doubling down amid talk of taxes on auto imports -- currently NOT

having same effect as they did late last week. Concerted risk-on move extending

ranges in second half:

* Tsy futures continue to make session lows, long end leading move 

* While equities climb higher, emini +27.0 at 2717.25 vs. 2721.25H

* US$ index +.116 at 90.051 while Yen gains vs. USD 106.192 off last -- well off

early low of 105.35. Session flow includes fast$ and prop selling 5s and 10s,

bank and real$ sellers in 10s and 30s modest deal-tied flow in front end, early

paying in 2s and 3s followed by receiving in 5s and 10s, light flattener unwinds

in 2s10s and 5s 30s, FX-tied selling in intermediates-long end.

* Pres Trump tweeted earlier metals tariffs will "come off" if favorable NAFTA

agreement made, markets becoming more inured to his methods.