Tsys trading mixed after the bell......>

US TSY FLOWS: Tsys trading mixed after the bell. No longer transitory -- yld

curves bull steepening after rates surged following Fed chair Powell's

semiannual testimony signaling likelihood of coming rate cut amid persistent

"risk of weak inflation". 

- A couple dealers (MS, UBS), meanwhile, grew louder on their call for 50bp cut

at the next FOMC. Short end surged to reflect the dovish tone so much that

probability of 50bp cut climbed back to 25% from zero this morning.

- Decent, but not exceptionally heavy volume on the day (TYU just over 1.75M in

late trade) amid robust buying in shorts to intermediates after better selling

coming into the session, real$ selling long end, curve flattener unwinds. 

- Tsys came under pressure briefly after the latest $24B 10Y note auction

re-open (9128286T2) tailed -- awarded

2.064% rate (2.130% in June; 3.085% avg) vs. 2.055% WI; 2.41 bid/cover (2.49

previous).

- The 2-Yr yield is down 8.5bps at 1.8216%, 5-Yr is down 5.3bps at 1.8259%,

10-Yr is down 0.5bps at 2.0595%, and 30-Yr is up 3.3bps at 2.5729%.