Tsys have edged back towards pre-FOMC.......>

US TSYS: Tsys have edged back towards pre-FOMC levels overnight, sitting flatter

after the belly of the curve played catch up after some early underperformance.

A 2.6K TYU8 block at 119.07 helped to support the space, as did reported demand

out of Japan, which led to fresh session highs being printed.

- To recap, US Tsys sold off after the FOMC delivered a hawkish (at the margin)

25bp hike, while it hiked the IOER by 20bp as expected, while the median dot now

looks for 2 further hikes in 2018 (4 in total). The longer end largely retraced

the move, with T-Notes finishing well off of worst levels and the curve flatter

on the day. There was a number of alterations to the Fed's opening statement,

principally a removal of the phrase "the federal funds rate is likely to remain,

for some time, below levels that are expected to prevail in the longer run,"

with no replacement. Powell also conceded that the Fed will be in the "neutral

zone relatively soon," while the FOMC is being very careful "not to tighten too

quickly."

- The Eurodollar strip has followed Tsys higher to trade flatter.

- T-Notes last at 119.13+, US 10-Year Tsy yield last at 2.942%.