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Tsys trading broadly lower (10YY....>

US TSYS SUMMARY
US TSYS SUMMARY: Tsys trading broadly lower (10YY tapped 2.9321%, 2.921% last),
curves regaining some lost ground after tapping new 10+-year flats Wed. Tsy
futures off session lows into midday, decent volume w/TYM>1.1M. Nevertheless,
midday trade rather quiet as Tsys inch off lows. US$ index higher/off recent
highs (DXY +.198, 89.821; US$/Yen>107.39); equities weaker/near session lows
(emini -21.7, 2688.0); gold weaker (XAU -4.95, 1344.48); West Texas crude off
best levels after making new 3+Y highs earlier (WTI +0.42, 68.89 vs. 69.5H).
- Tsys opened weaker, following Bund/Gilt sell-off during London hour. Gilts
weighed by supply and news UK gov lost key vote in House of Lords requiring it
to seek customs union with EU after Brexit.
- Tsys ratcheted lower, part technical based, pressure from FX and supply. Some
cite "inflation scare" post Wed's Beige Book, focus on steel prices. Inflation
scare w/core <2% still? Seems like today's steepening is a dead-cat bounce day
after 3 Fed speakers specifically mention flatter curve and implications.
- Flow includes CTS stop-outs in intermediate to long end curve unwinds, real$
and bank selling 10s, 30s, rate paying shorts to intermediates.

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