Virus-related headlines and US/China...>

US TSY FLOWS: Virus-related headlines and US/China geopolitical risk largely

drove market moves Wednesday -- risk-on the underlying gist: Tsys weaker (but

off lows late) and equities higher (off highs) after breaching resistance:

3226.25 set Mon vs. 3233.25 session high.

- Early risk-on triggered by better than expected data (June import prices rose

1.4%) and encouraging Oxford Covid-19 vaccine trial headlines after positive

notes on Moderna vaccine late Tuesday that buoyed equities.

- Early risk appetite gradually sold into midday as US/China headlines stirred

geopol risk (sanctions, Pompeo rhetoric, Trump exec order ending HK special

status).

- Risk-on green lighted again in second half after Bbg headline heralded Trump

"DOESN'T WANT TO ESCALATE CHINA TENSIONS". Equities continued to inch higher

late (ESU0 3219.5, +36.0).

- Two-way flow on more moderate volumes, supply muted as earning season kept

issuers sidelined. The 2-Yr yield is down 0.4bps at 0.153%, 5-Yr is down 0.6bps

at 0.2834%, 10-Yr is up 0.3bps at 0.6266%, and 30-Yr is up 1.9bps at 1.3295%.