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*** Tsys trading weaker early in....>

US TSYS SUMMARY
US TSYS SUMMARY: *** Tsys trading weaker early in the second half, near session
lows again after midmorning attempt to recover - pointing to Pres Trump name
calling cat fight w/Senator Corker this morning, potential for tax reform
delay/stoppage lending bid to Tsys.
- Quiet open as rates opened weaker, trailing softer EGBs on the back of various
stronger European PMIs. Limited react to second tier data. Technical selling as
10Y yld topped 2.4%.
- Move off lows on Trump/Corker tiff, flow included prop and fast$ buying in 10s
and 30s, insurance portfolio buying 30s. Deal-tied and pre-auction short setting
added to earlier pressure. US$ strength vs. Yen receded/added to Tsy bounce.
- US Swap, spds wider better rate and spd paying from fast$ and props, modest
deal-tied flow, spd curve steepeners and long end wideners.
- Eurodlr options, global macro super-sized large put spds in pit (-150k EOZ
80/81p spds vs. +75k each EDM 78/81 and EDU 77/80p spds, w/more recent Blocks
adding), acct rolling out and down a massive existing position, betting futures
underestimating rate hikes in '18.

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