They did it again, another late WSJ....>

US TSY FLOWS: They did it again, another late WSJ article citing Fed officials

that "Fed officials signal 25bp cut likely at Jul meeting" hammered the short

end, reversing yesterday's post-Williams move, chances of 50BP cut falling back

to around 20%. Reminder, the Fed go into media blackout after midnight tonight,

through the July 30-31 FOMC annc.

- Was a generally quiet end to week after Thursday's policy debate-related

volatility, trading weaker but holding off early overnight lows all session.

Short end rates gapped lower after latest Fed "signal".

- Underpinning Tsys some (and rallying crude levels) were late reports that a

British oil tanker was seized in the Straight of Hormuz by Iranian forces. Note

Gold did not see any safe-haven support on ME tension, down over 20.0 in late

trade to around 1425.0.

- Thin summer market depth saw 10Y futures come under early sell pressure as

large option acct took profit on 50,000 TYU 127/129 call spds bought earlier in

the wk. The 2-Yr yield is up 5.2bps at 1.808%, 5-Yr is up 2.8bps at 1.7947%,

10-Yr is up 1.5bps at 2.0396%, and 30-Yr is up 0.7bps at 2.5712%.