Tsys finished Wednesday on the back....>

US TSY/RECAP: Tsys finished Wednesday on the back foot, as equities rebounded

after the early risk-off flows on China's proposed retaliation to US tariffs.

The space had a little reaction to US ADP data, with the reversal occurring on

the back of comments from White House economic advisor Kudlow, who hinted that

tariffs against China may not go into effect, while he revealed that back

channel talks between the two countries are already under way.

- The Tsy space also shrugged off comments from FOMC non-voter Bullard, who

reiterated that a further rate hike is not necessary.

- Flow-wise, mid-morning two-way trade from specs & fast money accounts was

noted in shorter dated paper to intermediates; with real money & bank portfolio

buying intermediates out to the long end late on.

- The Eurodollar strip was steady/mixed in the short end, and weaker further out

in the strip.

- Swap spreads were running wider by the bell, as the short end pared early

widening and was back to near steady levels as Tsys reversed their early gains.

- T-Notes last at 120.23, US 10-Year yield last at 2.803%.