Treasuries finally stabilize and draw dip...>

US TSYS: Treasuries finally stabilize and draw dip buying after selloff earlier

on WSJ/Wash. Post stories saying US Pres. Trump met with Kevin Warsh Thurs on

potential Fed chair post; however there appear to be still 3 other contenders

including current Fed Chr Yellen. And this process won't be done until year-end,

said WSJ, so difficult to bet one way or the other so soon, said traders. Still

Tsys saw 2/30Y, 5/30Y, 5/30Y and 7/30Y curve flatteners done on potential for

hawkish policy if a new Fed chair is put in. 

- That occurs as some traders view Warsh as hawkish. Meanwhile others thought

MBS would not like Warsh in such a post, but that appears to be a matter of

great debate. "The Fed buying in MBS is coming to an end: by this time next

year, they will not be buying MBS more or less," said one trader, hence he

downplayed impact of whichever Fed Chair is in place by that time. 

- MBS higher coupon spreads widened on the news, said traders.