US Treasuries have recovered well...>

US TSYS SUMMARY: US Treasuries have recovered well from the low levels seen just

before Trump stood to deliver the State of the Union Address. Currently, the TY

is at 121-26, well above the 121-19 seen late on Tuesday.

- Between 3Y and 10Y the yield declines are around 2bp, while the two extremes

of the curve are struggling to keep pace.

- One decent jump in prices occurred soon after the European open, which

although Bunds rallied at the same time appeared to be led by the TY.

- It is a big day, with Janet Yellen presiding over her final FOMC meeting. By

now, the market would easily be able to absorb a slight hawkish move in the FOMC

statement when it is released at 1400ET/1900GMT.

- Note that it is month-end index duration extension day, flows that usually

turn up after around 1430ET. There is also much talk of balanced funds

re-adjusting their portfolios toward bonds and away from equities although such

changes often have more impact in the new month or quarter rather than showing

up on the final day.

- Data sees ADP, Chicago PMI and pending home sales.