Sharply higher, curves reversing....>

US TSYS SUMMARY: Sharply higher, curves reversing more than Wed's post FOMC bear

steepening move as market makes amends with Fed holding dots at 3 for 2018,

viewing 2019 under a more dovish lens than first seen Wed -- when eye on more

aggressive Fed in 2019 eyed. Multiple factors added to rate rally, knock-on

react to steady BoE, weaker US$ vs. Yen, $50B in tariffs against China annc'd --

spurred risk-off w/equities falling sharply.

- Buy the rumor/sell the news: sources reported fast- and real$ selling 5s and

10s, cash and futures after tariff annc. Little initial react to $50B tariff

annc on China over intellectual property theft, anticipated, profit taking as

Tsys pared gains/equities pared losses. 

- Tactical curve steepener unwinds, better buying from fast- and real$, bank

portfolios in 5s, 10s and 30s. Decent deal-tied flow, pick-up incorp supply.

- US$ index firmer (DXY +.068, 89.851; US$ weaker vs. Yen 105.6); equities

fading again late (emini -46.0, 2672.25 vs. 2663.25L); Fold weaker (XAU -5.03,

1327.42); West Texas crude reversing some of Wed's rally (WTI -0.68, 64.49).

- Late ylds: 2Y 2.285%, 3Y 2.432%, 5Y 2.630%, 7Y 2.757%, 10Y 2.830%, 30Y 3.065%