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Tsys chopped higher/off highs by the...>

US TSY FLOWS: Tsys chopped higher/off highs by the bell. Rates recovered
slightly after Tue's sale, decent volume after midday (TYZ>1.17M), curves bull
flattening. Tsys inched higher after Aug final demand PPI -0.1% overall, first
decline since Feb'17. Late morning excitement on headlines US proposing new
round of trade talks w/China, fast risk-on react from algos on the headline,
buying equitys, selling Tsys. Risk-on unwind soon after, sources said on mkt
disappointment that Tsy Sec Mnuchin would be handling, NOT trade rep Lighthizer.
- US$ sold off, dollar index DXY -.448, 94.801 (94.753L/95.283H), $/Eur +0.0021
at 1.1627, $/Yen -.40 111.24; equities weaker (emini -2.0, 2887.75 vs.
2895.25H); Gold bounced (XAU +8.54, 1207.12); West Texas extended Tue's rally as
Hurricane Florence threatens Eastern seaboard (WTI +1.0, 70.25 vs. 71.26H). 
- Prop and fast$ buyers early, algo/program trading acct sellers late morning,
decent corp-supply hedging for third consecutive session, 2s10s fatteners. HEAVY
Eurodollar volume, heavy sales EDZ9, buyers EDZ8 and EDM9, heavy buying Jan19
FF. Tsy cash/ylds: 2Y 99-24.5 (2.744%), 5Y 99-15.5 (2.860%), 10Y 99-07.5
(2.963%), 30Y 97-28.5 (3.108%).

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