The space finished lower in lieu of....>

US TSY/RECAP: The space finished lower in lieu of a very soft 7-Year note

auction after trading in line with broader risk sentiment on Wednesday. A larger

than expected upward revision to US Q4 GDP temporarily weighed on Tsys in early

NY hours, but a sharp sell-off in Nasdaq stock futures resulted in a recovery in

rates.

- Fed voter Bostic noted that there isn't upward pressure in wages, although he

did highlight that inflation is rising. Bostic stressed that the FOMC needs to

get back to neutral, albeit in a gradual manner.

- The space had moved off of highs heading into the 7-Year Note auction, which

registered a near 2bp tail. This resulted in Tsys moving lower, with the short

to medium sectors underperforming longer dated paper, and thus a flatter curve.

Geopolitical stories also weighed on Tsys with Asahi reporting that North Korea

is seeking a summit with Japan.

- Swap spreads were mixed with 5-Year 0.5bp tighter but 2s, 10s & 30s a touch

wider.

- T-Notes last at 120.26+, US 10-Year yield last at 2.781%.