Spds running wider, recovering slightly....>

US SWAPS: Spds running wider, recovering slightly after gapping tighter late Mon

(2Y down to June 2016 lvls (-3.12 to 12.12). Appears short term funding pressure

for banks being felt earlier than normal headed into year end (though 1M LIBOR

higher again today +0.0118 to 2.4323% (+0.0321/wk). Some speculated compression

exacerbated by forced unwinds/deleveraging from Risk-Parity accts. Latest spd

levels:

* 2Y +1.06/13.81

* 5Y +0.88/9.69

* 10Y +0.75/3.75

* 30Y +1.56/-14.19

Monday recap: Not a good sign for the the short end -- Spds gapping tighter

across the curve -- making new lows for year in short end, 2Y revisiting levels

not seen since Jun 2016, while 5- and 10Y are at May 2018 lows 30Y at April 2018

inversion/lows. Appears short term funding pressure for banks is being felt

earlier than normal headed into year end. Earlier flow favored rate receiving in

2s-5s and -n-line spd curve steepeners.