The big event in the Treasury.......>

US TSYS SUMMARY: The big event in the Treasury market was the tax plan presented

by Trump but the initial reaction was muted and it took a few hours to

incorporate the triple threats of: likely more Tsy supply, more fiscal stimulus

and higher equity prices.

- While the chance that the tax plan is eventually passed may be well below

100%, the 10Y UST yield rose above the 200 day moving average and is currently

trading at around 2.344% (+3.4bp on the session).

- The curve has steepened quite aggressively as the 2Y yield is only 0.8bp

higher at 1.48%.

- The month and quarter end takes place tomorrow and it is no surprise to see

that use of the Fed's overnight RRP facility has jumped to USD220bln as (mainly)

European banks shrink their balance sheets. A number in the USD300-450bln usage

is a more end of quarter range.

- Today sees the final auction of the month, the 7Y (yesterday's 5Y auction went

well at these higher yield levels) and speeches by Fischer, George and Bostic

from the Fed.