Treasuries slide more amid 30Y, 10Y.....>

US TSYS/30Y: Treasuries slide more amid 30Y, 10Y selling into 30Y auction. BMO's

Aaron Kohli noted 30Y bond auction "is a bit more insulated from the current

hawkish Fed rhetoric and a hike with promises of more to come could only help

the curve flatten. Only a miss on CPI or a less hawkish Fed are likely to cause

the bond to durably underperform. That's mostly because we believe that the

market will see strength in CPI as encouraging the Fed in the near-term while

not materially changing the longer-run trajectory of low-flation. 'Til that

changes, we expect strength in CPI to further flatten the curve even if it does

raise yields marginally."

- He adds "Fed will not be buying at this auction" as nothing maturing in SOMA

acct; 30Y " rarely trades special in repo so this could have less of an impact."

- But he warns 30Y was building "slight concession since late last week but

"looks rich on an outright yld basis. The long-bond still looks rich on most

curves" amid "broad flattening bias" of "last few months. We see the flattening

as likely to persist in 2018 and would use any near-term steepening as an

opportunity to enter the trade."