Treasury yields have taken no.......>

US TSYS SUMMARY: Treasury yields have taken no benefit from fairly dovish

comments last night by Atlanta Fed President Bostic who said that the economy

may not need 3-4 hikes per year.

- Instead, Treasury yields showed very little direction in Asia and have slipped

in the European time zone as the EGB market initially headed lower from the

start.

- The US curve is bear steepening today led by the Bond sector. The 30Y is

+2.3bp but, it is the futures contracts that are pulling the curve around. The

sector from the Bond CTD (Feb-36) to the Ultra CTD (Nov-43) that is moving most

rapidly. 

- The dollar has strengthened (for a change) and this appears to herald from a

decision by the Chinese to remove the counter-cyclical buffer from the fixing.

As a result the offshore yuan is extremely volatile. The usually reliable JPYUSD

correlation to the UST 10Y yield is fleeting at the moment.

- Later today will see the release of NFIB and JOLTS reports. The Treasury sells

$50bln 4 week bills and $24bln of 3Y notes.