US Treasuries are trading sharply...>

US TSYS SUMMARY: US Treasuries are trading sharply lower, with the yield curve

bear steepening, suffering from heavy selling, curve steepening and downside

options plays in German Bunds. 10-yr UST is +5.7bp at 2.293%.

- US Treasuries were already on the back foot following a weak Asian session as

German Bunds opened lower at start of London session. There did not appear to be

a catalyst for the heaving selling that happened shortly afterwards but traders

reported a number of stops being triggered in German 10-yr Bund contract

following large 5s/10s steepener trade.

- Although with the US Dollar stronger against both the EUR and GBP, it appeared

markets were looking ahead to US President Trump's tax reform speech expected

later today.

- US 2s/10s is 2.6bp steeper as the bulk of the sell-off was seen in the long

end. 2-yr swap spreads are 1.2bp tighter, while 10s are 0.15bp wider.

- Traders reported seeing some Euro$ steepeners go through with EDH9/EDH0 lifted

at 17 in 13k, heavy downside play in options -- 25k 2ERZ7 put condors and

outright selling in TYZ7 at 22+/22