Priming the greenback pump? US Pres....>

US TSY/RECAP: Priming the greenback pump? US Pres Trump in Davos says Tsy Sec

Mnuchin weak greenback comments Wednesday are taken out of context. US$ reverse

weakness/trade higher (DXY 89.495 +.289 vs. 89.580L), risk assets fall

(equities, gold, oil). Tsy yld correlation to US$ snap back in place (for the

moment at least) as Tsys surge/yld curves crater to new 10Y lows. - Aside from

late night headlines from Pres Trump, focus turns to Fri's headline GDP release

(3.0% exp) and durables (.9%), Fed remains in communication black-out ahead Jan

31 FOMC). 

- Volatile day for US$, heavy pressure as Euro surged on post ECB annc/pres

Draghi comments "very few chance of rate hike this year on data". Draghi also

implied Mnuchin injected unwanted FX volatility w/$ comments. 

- Heavy 2-way flow w/better buying 5s-30s late morning on, 5s30s flattener

Block. Strong $28B 7Y auction stopped through with 0.013bp to 2.565% rate.

Modest High-grade issuance, $3B Capital One 3-tranche lead. 

- Long end swap spds gap tighter late, doesn't look like easing bank regs soon.

- T-Notes down 1 tick at 122.13 in Asia, 10-Year yield last up 0.6bp at 2.623%