Quiet start to wk, Tsys reverse.....>

US TSYS SUMMARY: Quiet start to wk, Tsys reverse early risk-off bid on $15B

Bayer 8-part issuance. Early support on trade war concerns w/China, muted volume

w/China out on holiday. Data limited to housing items, BoE policy annc Thu.

- US$ off (DXY -.030, 94.758; US$/Yen -0.14, 110.51); equities off lows (emini

-10.25, 2774.25); gold near steady (XAU -0.06, 1279.48); West Texas crude firmer

(WTI +0.74, 65.80 vs. 63.59L).

- Long end Tsy bid evaporated, slipped to session lows mid-late morning as

incoming supply from Bayer 8-tranche (3Y-30Y) spurred spec acct sales before

$15B issuance annc'd (Historical context, top 3 mega deals: $49B Verizon from

Sep 11, 2013; $46B AB InBev from Jan 13; March 6 $40B CVS 9-Part CVS). Equities

trimmed steeper losses (FANG shares kicked it off), adding to reversal in rates.

Less certain signal, US$/Yen is see-sawing off lows 110.47 last. Bit of a

dead-cat bounce for curves moving off lows at moment but likely to resume longer

term flattening w/inversion a real possibility in near term. 

- Tsy cash/ylds: 2Y 99-28.5 (2.553%), 5Y 99-24.75 (2.799%), 10Y 99-17 (2.928%),

30Y 101-09.5 (3.058%)