Tsys backed away from highs late on,...>

US TSY/RECAP: Tsys backed away from highs late on, with the curve sitting

flatter on the day as the long end outperformed. The move was probably a result

of warmer discussions between the US & North Korea.

- It was a very quiet session with many side-lined ahead of multiple Fed

speakers before the media blackout beginning on Saturday.

- Market reaction to Tuesday's Fedspeak was limited as Williams, Harker, Evans &

Bostic all stuck to their respective scripts. There was also limited reaction to

a flurry of second tier data.

- A large block 2-/10-Year Ultra flattener was noted, as was decent corporate

issuance, with the ensuing hedging flow apparent. 2-way spread flow was also

noted with payers seen in 2s and 5s. Decent Eurodollar option volume was also

seen, it was 2-way with a decent pick-up in upside call buying.

- Fed voter Dudley & Governor Quarles are due to speak on Wednesday.

- T-Notes last at 120.14, US 10-Year yields last at 2.829%.