T-Notes tick lower last -0-04 at 127-13.....>

US TSYS: T-Notes tick lower last -0-04 at 127-13.

- Expectation management was the name of the game for the Fed on Friday after

Thursday saw the NY Fed issue clarification re: William's latest speech, which

was driven by his academic studies, as opposed to an outright view on current

MonPol settings. Later Friday dovish voter Bullard reiterated his preference for

a 25bp cut, while fellow voter Rosengren told CNBC that the U.S. econ "is quite

strong" & isn't showing signs that more accommodation is needed. Finally, the

latest WSJ piece noted that "Fed Officials Signal Quarter-Point Rate Cut Likely

at July Meeting," market reacted as if this was a sources piece, although upon

reading it seems more like a recap of recent Fed comments.

- The Fed has now entered the blackout ahead of its July 31 decision, with Fed

Funds futures pricing a circa ~20% chance of a 50bp cut at writing.

- Tensions in the Gulf saw Tsys move back from lows on Friday, but T-Notes waned

again into the close, while the cash space saw the curve bear flatten.

- Flow wise, Friday's highlight saw one account seemingly take profit on 50K

TYU9 127/129 call spreads bought earlier in the week.