Treasuries weakened as news wires...>

US TSYS SUMMARY: Treasuries weakened as news wires reported that Trump had been

impressed by Stanford economist, John Taylor. 

- The news caused a 2bp spike in the 10Y UST, which subsided after a few

minutes. However, sellers emerged in Asian time and the Treasury market traded

soft all the way through early European trade.

- Speculation that Taylor might be the next Fed Chair might have been expected

to flatten the yield curve. This was evident in the 10-30Y section of the curve,

or more precisely between the US-WN spread. 

- There should not have been much reaction in the sub-5 month section of the

curve given that the new Fed Chair would not see a first FOMC meeting until

March 21 next year, but the carry/roll heavy sector was easily the weakest of

the entire yield curve today.

- The 5-10Y section of the US curve hit 35.2bp yesterday, its lowest since Nov

2007 and this has flattened far more aggressively than the 2-5Y.

- Perhaps as a consequence of the curve movement, at 09:36BST there appeared to

be a USD179.4k 5Y-8Y-10Y Fly, receiving the belly at 7.125bp.