Tsys ground higher in the second....>

US TSYS SUMMARY: Tsys ground higher in the second half, still off early session

highs even as US$ holds gains back to late May highs (DXY +1.021, 94.565;

US$/Yen +0.9, 110.44); equities stronger (emini +10.5, 2789.50). Curves resume

flattening/new 11-year lows -- but don't expect to potential inversion/recession

signal to slow down policy tightening anytime soon analysts widely saying ("same

way" the Fed "dismissed inflation expectations declines for two-years" one

expert posited). Stocks firmer (emini +10.0, 2789.0); gold firmer (XAU +5.65,

1304.99; West Texas crude pared gains/steady (WTI +0.0 to 66.64).

- Relatively quiet session, Tsys ignored weaker EGBs ahead of the ECB annc, ylds

directional w/lower US$/Yen after pair gapped to 110.85 post FOMC Wed -- nearing

lvl in late Thu trade. No react to data, Fed out of media blackout at midnight;

BoJ policy decision overnight. 

- Combination of stop-out/sporadic short-covering on session, particularly

during ECB annc. Decent technical buying on 10YY decline to 9.3 after breach of

3.0 post FOMC Wed. Tsy cash/ylds: 2Y 99-27.25 (2.574%), 5Y 99-22.5 (2.813%), 10Y

99-13.5 (2.941%), 30Y 101-06 (3.063%)