T-Notes +0-01 at 131-01+ in early Asia......>

US TSYS: T-Notes +0-01 at 131-01+ in early Asia. Contract went out just shy of

late highs, rallying in the wake of the latest FOMC decision, which saw the Fed

leave the Fed Funds target band unch., as it hiked the IOER & overnight reverse

repo rate by 5bp apiece. The Fed also tweaked its language re: inflation &

downgraded its assessment of household consumption. On the funding market front,

it noted that it would continue conducting term & overnight repo operations

through April to mitigate risks of money market disruptions (several Fed members

had previously outlined April as a potential period of stress for repo markets).

Powell noted that the Fed is trying to find an equilibrium in ample reserve

regime, and that there may be a place for repo ops after ample reserves are

reached. Powell also noted that "asset valuations are somewhat elevated."

Worries about the impact of Coronavirus on China's Q1 GDP resurfaced, with Fed

Chair Powell also providing some commentary on the matter in his presser. Yields

5.0-7.3bp lower come Wednesday's close, as the curve bull flattened.

- Pressure on U.S. equity futures post-Facebook earnings also helped the Tsy bid

late on, although equity futures have managed to edge higher after re-open.