Slow-mo react on weaker than........>

US TSYS SUMMARY: Slow-mo react on weaker than expected retail sales -0.1% vs.

+0.4%. Some early chop with Tsys reversing early gains on brief surge in

equities. Tsys rebound/make new session highs after Atlanta Fed lowered 1Q GDP

est to 1.9%, several dealers following suit citing weak retail sales. Minor

revision fail to balance the weaker Feb read while PPI ex food and energy comes

out flat to

prior month. Sharp drop in equities and US$/Yen added to sharp bull curve

flattening.

- US$ index off lows late (DXY +.047, 89.711); equities weak (emini -20.0,

2752.75); gold little weaker (XAU -.89, 1325.56); West Texas crude little firmer

(WTI +.16, 60.87).

- Short end under pressure/narrow range ahead next week Wed's FOMC policy annc,

.25bp hike priced in, mkt will be paying close attn to SEP, Fed Powell presser.

Mixed flow in first half followed by better real$, fast$ and bank buying in

intermediates to long end, light deal-tied flow, swap-tied receivers in 2s-5s.

- Late ylds: 2Y 2.256%, 3Y 2.402%, 5Y 2.605%, 7Y 2.745%, 10Y 2.812%, 30Y 3.052%