MUFG Securities Americas rates.....>

US TSYS/RESEARCH: MUFG Securities Americas rates strategist John Herrmann said

2s-10s Treasury yld curve "remains near the lower yld spread floor of its 7-wk

trading range; a risk that might steepen the 2s-10s curve back towards 100 bps

is our concern over central bank Q.T. (Quantitative Taper) announcements and

policies during the months of September and early October."

- He adds "an adverse mkt reaction to Q.T. announcements may steepen the 2s0-10s

yield curve in a 'tantrum' reaction: possibly back to a yld spread of 100 bps,

possibly more. Such a 'tantrum reaction' is a risk to our baseline scenario of a

moderate rise in ylds across the yield curve over 2H-2017 and a slight

steepening towards of the 2s-10s Treasury yield spread towards 101 bps over the

coming 6 weeks."

- Herrmann said it's "still less than 4 wks away from a possible ECB

announcement, and the MOVE index is highly complacent (at a multi-decade low

pt), as mkt participants have little fear that central bankers will may be

overly hawkish and announce a policy 'mis-step.'"