Spds running mostly tighter, 5yr lagging...>

US SWAPS: Spds running mostly tighter, 5yr lagging while 2s continue to lead spd

curve steeper amid modest two-way, recent rate paying in 2s and 3s. Latest

spread levels:

* 2Y -0.69/26.62

* 5Y +0.06/8.69

* 10Y -0.25/-3.12

* 30Y -0.12/-31.12

Thursday recap: Spds running wider, belly lagging wings with the short end

reversing early narrows, joining long end late. Flow two-way in the short end on

net, modest deal-tied flow in the mix. Accts have been sporadically fading the

flattening in Tsy curve, scaling into the curve trade w/better front end

receiving since the FOMC annc. Swap desks  expect corporate issuance to start

picking up as well, typically a narrowing factor for spds but overnight repo

specials in 2s-10s has buffered compression for several sessions. Fast$, props

and insurance portfolios accts starting to get active. OTC vol lower across the

surface, reversing early gains.