*** Mkts discounted retail sales....>

US TSYS SUMMARY: *** Mkts discounted retail sales miss (-.3% vs. +.2% exp),

focused on strong CPI gain (0.5% vs. .3% exp), dealers down-revise Q1 GDP est's,

up rate hike calls. Equities rebounded and holding gains (emini +11.0, 2672.75),

while 10Y yld tapped new 4-year high of 2.9168%. 

- US$ index still soft (DXY -.619, 89.084); gold strong (XAU +24.79, 1354.42);

West Texas crude little bounced (WTI +1.59, 60.78).

- Heavy flow included real$ sales, fast$ covers, off-the-run sales. 

- Tsys traded higher overnight, ally extended as US$ continued to recede vs. Yen

(off 16.84 low to 107.37, Nov 2016 lows) following lower than est Japan GDP

(+.1% Q/Q, +.5% ann). Tsys pared gains as US$ bounced into the London crossover.

Tsys sold off sharply post data,curves mixed with 10s and 5s underperforming.

- Heavy front end Eurodollar sales in Whites-Reds (EDH8-EDZ9) as data increases

inflation metrics and tighter policy expectations, heavy low delta put buying

after moderate unwinds earlier in week, some profit taking selling as well.

Implied vol choppy, receding on rebounds in underlying

- Late ylds: 2Y 2.172%, 3Y 2.399%, 5Y 2.647%, 7Y 2.841%, 10Y 2.917%, 30Y 3.181%