US Treasuries are trading mixed.....>

US TSYS SUMMARY: US Treasuries are trading mixed having bounced off early

European morning session lows with yield curve modestly flatter as UK inflation

surprisingly falls and Eurozone HICP is revised lower. US 10-yr yield is close

to US closing level at 2.8285% having traded in a range of between 2.8212% to

2.8396% so far Wednesday.

- It was another relatively sedate Asian session for US Tsys, with a report

suggesting that Mike Pompeo travelled to North Korea to meet with Kim Jong Un

keeping a lid on Tsys. T-notes operated in a 3+ tick range.

- T-note future slipped lower weighed by soft opening in German Bunds, however a

positive opening in UK gilts and recovering in Bunds saw the future regain lost

ground.

- A large 2s/10s flattener trade going through futures (11,498 TUM8 @ 106-03+ vs

4,217 UXYM8 @ 128-31 at 0844:54BST) then supported recovery in the long end

while the short end remained in negative territory. 

- Swap spreads are modestly tighter while breakevens are little changed. 

- Attention now turns to US MBS mortgage applications and BOC rate decision.