*** Tsys trading mixed after........>

US TSYS SUMMARY: *** Tsys trading mixed after midday, curve steeper w/short end

well bid/extending top end of range early in the second half. 10Y yld back to

2.312 after breaching 200-DMA earlier. Futures inched higher after strong $28B

7Y goes, stopped through 2.130%, drew very strong 70.6% indirects.

- Little react to weekly claims (+12k to 272k), 2Q GDP rev up to +3.1% SAAR

- Futures had slowly climbed off lows prior to auction, however, decent short

end buying w/ +11,200 TUZ 107-28.75, large 107-28.5bid (130k+). Heavy buying

Dec'17 Eurodlr futures (up to +0.020) supported front end, Dec rate hike% at

64.9% vs. 71.3% late Wed.

- Eurodollar option flows continue to see better Dec put sellers (front, 1- and

2Y midcurves) and call buyers -- traders fading the sell-off in short end this

week with a few exceptions.

- Flow included corp deal/auction tied hedging, XX-acct buying/short covering as

US$ gave back fraction recent gains vs. Yen in second half. mild buying 2s, 3s

and 5Y cash. Earlier, traders reported two-way flow, including mild FX sales

Tsys, ongoing curve steepeners done too.