Rates weaker, carry-over from late.....>

US TSY FLOWS: Rates weaker, carry-over from late Wed's post-Sep FOMC minutes

sell-off, deemed more hawkish than expected, Tsy curves bear flattening, US$

index mildly lower, equities weaker as well.

- Tsy Dept report: Macroeconomic and Foreign Exchange Policies of Major Trading

Partners of the United States out Wed late afternoon. China not pegged as

manipulator, but Tsy Sec Mnuchin cited lack of FX-policy transparency and Yuan

weakness as points of concern; Tsy dept keeps same six countries on watch list:

China, S. Korea, Japan, India, Germany and Switzerland.

- Tsys actually traded in narrow, lower band overnight, long end recovering some

ground last half hour, curves bending flatter. Flow included 2-way in 5s-30s

from fast- and real$, bank sales 30s. Short end under pressure after 3M LIBOR

gapped +0.0194 to 2.4690% (+0.0326/wk), EDZ8 chopped -0.045 to 97.25 low, 97.26

last. FRA/OIS gapped wider as did 2Y swap spds (+1.56 at 21.25) but is receding.

Earlier real$ receivers 7s.

- Tsy cash/ylds: 2Y 99-22.75 (2.899%), 5Y 99-05.25 (3.058%), 10Y 97-09 (3.198%),

30Y 93-04.5 (3.365%).