QUOTES-Treasuries whipsaw as tariffs leave markets teetering

April 8 (Reuters) - The U.S. Treasury market swung from buying to heavy selling on Monday in one of its most volatile days in years, as investors grappled with U.S. tariffs due to take effect on Wednesday.

Benchmark 10-year yields traded in a 35 basis point range and expectations for a U.S. rate cut in May hurtled from about a 1/2 chance to about a 1/3 chance. The ICE BofA .MOVE index of bond-market volatility hit its highest in 18 months. US/

Swap spreads USDSR2YOTS=TWEB, or the gap between Treasury yields and interest rate swaps, tightened sharply as investors turned sellers of Treasuries.

Here are comments from market strategists and analysts on the moves:

VISHNU VARATHAN, HEAD OF MACRO RESEARCH ASIA EX-JAPAN, MIZUHO, SINGAPORE

"All the cash that was waiting to liquidate and rush into USTs ... there was some element of backing out from there.

"It's the sobering realisation that the Fed put is some distance away ... there's a conspicuous lack of clarity. The next 28-30 hours (until tariffs take effect) are critical."

MARTIN WHETTON, HEAD OF FINANCIAL MARKETS STRATEGY, WESTPAC, SYDNEY

"What do you sell if you need to meet margin calls or liquidity? Treasuries and gold ... portfolio rebalancing puts investors back into equities here, not bonds."

ANDREW LILLEY, CHIEF INTEREST RATES STRATEGIST, BARRENJOEY, SYDNEY

"There's a period of time in any market blow up where, where you are not even attempting to think through the implications. You are simply liquidating all your risk ... if equity markets are crashing, you will initially see bonds rallying in response. But then at some point, rationality takes over.

"It was always natural that yield should rise in response to tax ... so all that we got last night was the resolution of what should have been rational the entire time."

JOHN BRIGGS, U.S. RATES ANALYST, NEW YORK

"As the market anticipates easing, the long end only has so much room to go unless the Fed goes very easy.

"Think of it this way - if neutral is 3% or 3.25%, and you price in 1% of Fed easing to deal with current risk aversion and recession probabilities ... then why should the long end rally below 4% or more 3.75%? Unless you think the Fed is going to 2%, (which is) hard to argue in a still higher inflation environment."

PRASHANT NEWNAHA, SENIOR ASIA-PACIFIC RATES STRATEGIST, TD SECURITIES, SINGAPORE

"Bonds outperformed swap on the rise in yields into late evening in Asia yesterday and then bonds underperformed swap as the rise in yields accelerated into the U.S. close."