BMO analyst Ian Lyngen said the.....>

US TSYS SUMMARY: BMO analyst Ian Lyngen said the Treasuries "selloff into

month-end hasn't materially altered our take on the Treasury market and, if

anything, the underlying causes of the downtrade only further solidify our

range-trading thesis in 10s and 30s. We remain bearish on the front-end of the

curve (out to 5s) as the Fed's insistence on tightening policy only finds

further support in this week's series of events."

- He adds, "Let's face it, stocks apparently only have one direction to go

(higher), we saw core-PCE at +0.2% MoM in both September and October, and tax

reforms are effectively a foregone conclusion. If that's the case, Thursday's

price action offered reinforcement of our interpretation of the market's current

reaction function to positive news - a flatter 5s/30s curve. We maintain that if

this remains the case, the outperformance of the long bond will contain 10-year

yields as well, emphasizing the risk of a much flatter curve. In the 'race to

zero' we're watching the 5s/10s curve as an instructive bellwether (now at less

than 28 bp)."