*** Well off early lows, rates......>

US TSYS SUMMARY: *** Well off early lows, rates trading higher heading into

midday and the last leg of wk's newly upsized Tsy supply w/$16B 30Y bond

auction, caution after Wed's 10Y tailed .8bp. US$ index little firmer (DXY

+.126, 90.381), equities for sale (emini -41.0, 2627.75), gold firmer (XAU

1320.25), Crude extending Wed's late second half drop (WTI -1.01, 60.78).

- Tsys traded mostly lower on the NY open, just off post-BoE annc lows, Tsys

pared gains/traded lower w/Gilts, curves steeper on heavier volume (TYH>650k),

heavy selling TYH 120-27 to 120-24 before making new session lows of 120-17.

Wkly claims -9k to 221k, Dec housing Px +3.3%. Fed Harker see 2 hikes for 2018

- Massive duration weighted 10s/Ultra-bonds flattener Block faded week's

steepening (-33.6k TYH 120-17 vs. +8.6k ULH 156). Deal-tied flow, auction

hedging, short covering as equities came under heavy pressure. 

- Sources also reported heavy real$ selling in intermediates to long end

earlier, 2-way curve flow after large flattener block, 5s and 7s vs. 30s

steepeners, 10s30s flatteners. Real$ selling off the run 5s and 10s to get

current. Some desks expect another tail today.