T-Notes finished off of best levels,...>

US TSY/RECAP: T-Notes finished off of best levels, but were still firmer at the

end of Wednesday's session.

- The space drew support from Bunds on a BBG source report which suggested that

the fresh ECB growth and inflation forecasts will be cut to the extent that they

justify an new round of TLTROs. A more guarded BoC & a negative session for U.S.

equities also provided support.

- Early NY trade had seen positive revisions to ADP numbers provide some modest

weight to the space. Although much of the revision was attributed to benchmark

adjustments.

- Issuance was also in the spotlight, with Qatar's 3-tranche $ supply sized at

$12bn vs. the touted $10bn, with pricing tightening from IPT.

- The curve bull steepened on the day.

- Flow included deal-tied hedging, better buying in the belly from prop

accounts, real-money and bank portfolios. Buyers of call spreads in TYK9 and

FVK9 were noted.

- T-Notes last 122.05+, U.S. 10-Year cash Tsy yields closed at 2.693%.