T-Notes +0-01 at 128-25 after going out.....>

US TSYS: T-Notes +0-01 at 128-25 after going out near lows on Weds. Cash trade

saw bear steepening come the bell, with cash 10s experiencing a ~17bp intraday

range, a 99th percentile move when using the last 5 years' worth of daily

trading data. Volumes well above avg., including cash trade (per dealers).

Goings on in the Gulf were the main driver. The outcome was the de-escalation of

U.S.-Iranian tension, that many were looking for, coming to fruition, as Trump

addressed the world, pointing to a preference for the use of economic sanctions

on Iran, as opposed to military might after Iran's missile attack resulted in

little damage to U.S. assets, and was deemed more of a warning shot. That being

said, missiles have hit Baghdad's green zone in the time since Trump spoke,

providing a bump off the lows, before the move faded in late NY trade.

- The latest 10-Year auction added to the weakness, with a ~1.6bp tail, steady

cover ratio & average takedown metrics. Decent buying of the TYH0 127/128 put

spd was also seen. Elsewhere, ADP emp. data was much stronger than exp., with a

sizeable positive revision to the prev. print. Focus Thursday moves to Fedspeak,

with Clarida, Williams, Kashkari (x2), Barkin, Evans & Bullard all due up.