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Spds wider by the close but off first......>

US SWAPS
US SWAPS: Spds wider by the close but off first half highs when spd curve
flattened around same time Tsys started to pare early safe-haven gains. Risk off
tone/wider spreads likely to hold in the short term, at least as long as
safe-haven/risk-off tone related to N Korea tensions continue. On the flip-side,
spds likely to compress sharply if geopolitical concerns cool/resolve. Flow
included deal-tied hedging, rate paying by specs in 2s and 5s. long end saw
little activity. OTC vol surged in 1-3M10Y sector of grid in the first half,
pared gains but finish higher by the close, call skew in OTC and exchange traded
options gained vs. corresponding puts. Latest spread levels:
* 2Y +0.44/25.31
* 5Y +0.25/8.00
* 10Y +0.12/-3.75
* 30Y +0.19/-32.06

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