Tsys surged higher after dovish hold...>

US TSY FLOWS: Tsys surged higher after dovish hold announcement from FOMC, 30Y

yld <3.0 to 2.972% after the bell. Yld curves in long end bull steepened while

3M10Y curve gapped >9.7 bps flatter to 5.832% late -- indicative of rising

probability of recession over medium term. US$ index dropped (DXY -.435,

95.948); equities traded higher post FOMC until prospect of waning economic

growth outweighed monetary accommodation (SPX -9.5, 2827.0).

- Looks dovish all around on the median economic projections... Weaker GDP and

lower PCE inflation for both 2019 and 2020 (not the expectation of most analysts

who saw weaker 2019 in SEP but not 2020), lower long-term NAIRU and higher

unemployment forecasts across 2019-21 = room to keep policy easy. Powell

downplayed wage growth

- Not exceptionally heavy volume on day -- but much better than lead-up to

meeting (TYM>1.4M). Tsy futures continued to grind higher late. On tap for Thu:

Wkly claims; Mar Philly Fed Mfg Index; Leading Indicators for Feb; natural gas

stocks; Fed wkly securities holdings for Mar. Tsy cash/ylds: 2Y 100-06 (2.398%),

5Y 100-06.75 (2.328%), 10Y 100-27 (2.526%), 30Y 100-16.5 (2.972%).