The curve finished mildly steeper,.....>

US TSY/RECAP: The curve finished mildly steeper, as the long end made fresh lows

late in the session.

- Rates pared their early bid into Fed chair Powell's second day of testimony,

with muted reaction again, aside from the USD reversing its gains/moved lower on

Powell's comment that he is "more worried by lower inflation," although this was

more of an off-hand comment in response to what keeps him up at night as he

stressed that there are no issues "flashing red" for the economy.

- Futures volume remained low.

- There was a modest knock-on bid coming into the U.S. session with Gilts after

UK June inflation surprised to the downside.

- Good option flow was observed, with upside call buyers noted, 2s-10s

steepeners put into play & hedging in the front end.

- Fed's Quarles will speak later on Thursday, with Bullard due Friday ahead of

Saturday's blackout.

- T-Notes last at 120.01+, U.S. 10-Year Tsy cash yields closed at 2.869%.