Rates/Tsys have been buffeted by....>

US TSYS SUMMARY: Rates/Tsys have been buffeted by an apparent FOMC comms

breakdown since late Thurs/overnight Fri, with pre-FOMC blackout looming.

- Sep 10-Yr futures (TY) down 1.5/32 at 127-19 (L: 127-14.5 / H: 127-27.5).

- The 2-Yr yield is up 2.7bps at 1.7832%, 5-Yr is up 2.5bps at 1.7914%, 10-Yr is

up 1.7bps at 2.0413%, and 30-Yr is up 0.5bps at 2.569%.

- Market pricing of >60% odds of 50bps cut in July (post Clarida and Williams's

comments late Thurs) have been pared back since NY Fed played down statements;

odds back below 50%. EDU9 and EDZ9 off 2.5-3 ticks.

- In our humble opinion, Clarida/Williams comments looked aimed at justifying

July cut rather than waiting, and not for cutting 50bps vs 25bps in July (see

our 0347ET POV: ASK NOT WHETHER TO CUT 50, BUT WHETHER TO CUT AT ALL).

- St Louis Fed Bullard WSJ interview published this morning; reiterates that

looking for 25bps in July, not 50bps (though interview was on Jul 11).

- Panel appearances today by Bullard (1105ET/1605UK) and Boston`s Rosengren

(1630ET/2130UK) - and that's all for scheduled Fedspeak ahead of the blackout.

- U. of Mich. Sentiment (p), 1000ET is the data highlight.