*** Rates recover/near steady.......>

US TSYS SUMMARY: *** Rates recover/near steady heading into midday and week's

final leg of Tsy supply, $12B 30Y bond re-open. Equities stronger (emini +13.0,

27.63.5), gold stronger (XAU +5.38, 1322.29), oil stronger but off highs (WTI

+0.96, 64.53).

- Early chop, Tsys indicated higher near mid-range on decent volume (TYH>1.2M

currently), reversed course on ECB headlines that guidance could gradually shift

in 2018. Rates had corrected higher after word Wed's after Bloomberg sources

story China would slow/halt Tsy purchases denied by China offcls. Rates had

already recovered from sharp bear curve steepener late Wed, surged in evening.

- Rates recovered slightly on weaker than exp PPI, supportive of short

end/steeper curve with participants not anticipating a blow-out figure for Fri's

CPI (0.1% est vs. 0.3% high-side rumor. Flow included moderate two-way trade

ahead midday, positioning ahead Fri's CPI, deal- and auction-tied hedging in the

mix, some sporadic scale-in 5s30s flatteners by props.

- Curves reversed early steepening, 2s10s -0.514, 57.519 (58.945H/55.511L) vs.

62.336 high Wed; 5s30s -0.553, 56.206 (57.704H/55.479L) vs. 59.513 high Wed;