Asian trading was saw a small.......>

US TSYS SUMMARY: Asian trading was saw a small risk-off trade benefit the

Treasury market as the results of the German election filtered through. The

Far-Right AfD, outperformed their polling and the entry of the party into the

Bundestag has prompted much chatter.

- The initial reaction at the European open was muted but soon the Bund started

to rally, outperforming the periphery and dragging US Treasuries higher. 

- The 10Y yield is currently 1.3bp lower than the Friday close at 2.238% with

the curve flattening and led by the 10Y section of the yield curve.

- The very front end of the US curve, up to 1.5Y is actually seeing yields

higher on the session and adding to a decent flattening of the curve. Currently,

the 2-10Y spread is down 1bp to 80.6bp, its lowest since 9 Sep.

- Later today sees the usual Monday 3m and 6m bill auctions. Remember that the

previous 6m auction was poorly bid because of debt ceiling uncertainties.

- Tomorrow, the 2Y auction will begin the week's 2Y, 2Y FRN, 5Y and 7Y auction

set. There is very little economic data today but Dudley, Evans and Kashkari

speak; 3 traditional doves.