Tsy futures trading sharply lower,.....>

US TSY FLOWS: Tsy futures trading sharply lower, near bottom of range w/curve

bear steepening on heavy volume (TYZ >620K), US$ gains, hawkish Fed, US tax

reform chatter and drop in Bunds added to sell-off. Equities firmer (emini

+4.75, 2500.25), gold weaker (-5.20, 1288.97), oil near steady (WTI +0.02,

51.90).

- Asia, weaker Yen vs. US$ on PM Abe's call for snap election and hawkish Fed

tones for year end hike helped kick things off. Sources reported moderate

selling to start, gained momentum on Trump corp (20%)/individual (35%) tax

reform chatter. Flow included $manager and real$ sellers 5s and 10s, pre-auction

short sets.

- London, sell-stops hit early as sale momentum grew -- fast$, real$ and central

and domestic bank sales, end users reportedly hit bid at lows amid dip buying.

Buying occurred in fives tens and thirties at the lows, fund buying 5s

- Swaps, spds running tighter, modest two-way in shorts to intermediates, bank

paying 10s.

- Eurodollars, lower/near lows on decent volume, Dec rate hike% over 80%