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Bearish Cycle Still In Play

US TSYS SUMMARY: Tsys trading stronger, best volume of week (TYU>490k), early
risk-off bid as trade US/China tensions return, US Pres Trump admin proposed
another $200B in tariffs late Tue (not imminent/under review through late
August). US$ dropped immediately after annc but has regained footing. More
substantive round of data today includes PPI, $22B 10Y note auction and of
course headline watching as Pres Trump NATO summit gets underway.
- US$ index little higher DXY +0.152 to 94.310; US$/Yen higher +.22 111.21
(111.28H/110.77L); equities weaker (emini -18.75, 2778.0); gold little weaker
(XAU -5.04 1250.50); West Texas crude weaker (WTI -.49, 73.62).
- Asia, early risk-off rally, stops triggered on initial move, sources reported
better selling into the rally by myriad accts, fx-tied buying. London saw
two-way with Tsys holding rather narrow range after initial move, pre-auction
short sets ahead second leg Tsy supply ($22B 10Y), flatteners in the
intermediates. Swap spds mixed, belly wider, light 2-way in 2s and 3s, early
flys, fast$ paying belly. Tsy cash/ylds: 2Y 99-27.88 (2.565%), 5Y 99-14.5
(2.742%), 10Y 100-09.5 (2.838%), 30Y 103-19 (2.942%).
MNI Chicago Bureau | +1 312-431-0089 |