Natwest analyst Brian..............>

US TSYS/RESEARCH: Natwest analyst Brian Daingerfield said that with the Tsys

market "wholly focused on tomorrow's August CPI release, corrective moves in

both Treasuries and the US dollar continued today as Treasuries once again

traded on the defensive and the USD jumped against the majors, including the

EUR. Today's moves came despite the fact that the inflation readings we did get

in both the UK and the US disappointed relative to expectations. Starting in the

UK, after stronger than expected CPI inflation was released yesterday, the wage

inflation figure released this morning underwhelmed expectations." 

- He added that "across the Atlantic, the US PPI similarly underwhelmed relative

to the consensus expectation. But neither event was enough to support the

sliding Treasury market today. Headlines swirled surrounding tax reform as well,

and a report in Dow Jones suggesting a tax plan could be released as soon as

Sept. 25th may have supported the price action."