Tsys broke out of a narrow, mildly.....>

US TSY/RECAP: Tsys broke out of a narrow, mildly mixed range after midday as

Pres Trump and Congress agree on stop-gap $7.85B funding for Hurricane Harvey

aide AND 3M debt ceiling extension

- Moderate risk on/risk-off unwind followed limit extension announcement. Tsys

made new session lows, equities gained (emini +6.75, 2466.50); USD gaining vs.

Yen; Vol knocked lower along w/gold (-7.14, 1332.51). Tue's 4wk bill yield rise

over 2Y note yield has vanished. It's no real surprise inversion is gone

following stop-gap debt ceiling extension to Dec; general opinion will invert

again in Dec as time gets short. Swaps held wider levels 

- Flow largely two-way in the first half, sporadic consolidation after Tue's

sharp curve flattening safe-haven rally. Geopol tensions re: N Korea steady,

markets reactionary. Specs and fast$ buying in short end early, real$ +10s and

30s, bank portfolio 2-way in long end. Flurry sales by real- and fast$ following

debt ceiling ext'n. 

- Decent deal-tied flow after Tue's heavy $18.5B placement.

- T-Notes open Asia at 127.03+, 10-Year yield last 2.105%