After squeezing higher at start.....>

US TSYS SUMMARY: After squeezing higher at start of Asian session Treasuries

have traded sideways with the TYM8 future contract trading in a tight 2+ tick

range. US 10-yr Tsy yield last 1.1bp lower at 2.964% with the curve slightly

flatter.

- The 2-Year sector is underperforming ahead of supply due later on Tuesday.

- Sources highlighted better buying in the intermediaries in early Asia cash

dealing, although trading was somewhat limited following a softer than expected

headline Australian CPI release lending a modest degree of support to the space.

- In the European session Treasuries initially got a lift from soft German IFO

data but have since faded back to lower range as Bunds come under pressure head

of Italy, German and Finish bond supply

- The Eurodollar strip has traded in lacklustre fashion, with the white & red

contracts steady to 0.5 tick lower while greens and blues are steady to 1 tick

higher.

- Swap spreads are mixed with 2s and 5s circa 0.3bp wider, while 10s and 30s are

little changed.