Treasuries midrange in choppy.......>

US TSYS SUMMARY:  Treasuries midrange in choppy Wed: higher US open then more

buying, but mkt peaked soon after 0.1% CPI/0.2% Core. Tsys saw large post-CPI

cash 2/10Y flattener and massive nearly 24,000 (23,826) block buy at 8:59am ET

of TY contracts (10Y Tsy futures) at 125-03; equivalent to US$1.85M DVO1. 

- But Tsys then slid off high. . Investors also cited weak real wage data and

breaking multi-decade Tsy 5/30Y support line. Another block buy: 5,000 TYZ at

124-28 at 11:22am ET,cross on bid, sale of 4,000 EDH 1-yr Eurodlr bunds (Red

Mar'19 thru Green Dec'19). Mkt digested an 8:12am ET 8,000 buy of TYZ at

125-01.5 buy through.

- Tsys heavy volume as bull flattener (2s10s yld curve hit 10+ yr low of

63.882). Yrend worry, risk off, tax reform uncertainty, debt ceiling anxiety

fueled bid. Firm US$/yen then pressured Tsys. US swap spds mainly wider, curve

steeper amid Tsys bull flattening. Aside from earlier front end fly, rate

receiving, better rate/spd paying in intermeds to long end by prop, fast$ accts.

Tsy 3/10/30Y auctions settled. Traders mull potential year-end US$ funding

shortaged. US junk bonds weak; EU ones even weaker.