Adding to week's rout in rates, Tsys...>

US TSY FLOWS: Adding to week's rout in rates, Tsys weaker by the bell, near

middle overnight range after extending highs last 30 minutes. Decent volumes

(TYZ>505k), yld curves mixed w/3M10Y little flatter after moving appr 35bp off

last wk's inverted lows).

- Pick-up in data today w/PPI, Wholesale inv/sales; $24B 10Y note auction

(912828YB0). Trading floor observing several minutes of silence in remembrance

of 9/11.

- Sources reported fast$ selling across the curve earlier, misc acct selling in

10s on London crossover, swap-tied buying in long end; fast$ and prop acct

buying in belly to long end last hour followed by better selling from real$ in

10s and 30s. Lighter deal-tied flow,pre-auction short sets in 10s.

- The 2-Yr yield is down 1.2bps at 1.6641%, 5-Yr is down 1.1bps at 1.5799%,

10-Yr is down 0.7bps at 1.7247%, and 30-Yr is down 1.4bps at 2.2027%.