***Bund/UST 10Y contracts appear to have......>

BONDS: ***Bund/UST 10Y contracts appear to have finished their "it was a storm

in a teacup"-rally of the European morning and nerves are beginning to build

ahead of the European stock market opening. For the UST 10Y yield key levels

will be the low of Jan 24 at 2.609% and then the Jan 16 low of 2.52%.

- In terms of large rate futures positions: 3 month euro$ has very long dealer

positions with the offsetting short shared between the leveraged and asset

manager community. The other is the 30Y ultra where leveraged money is short and

asset managers long.

- In the US cash market US primary dealer positions are actually fairly lean and

un-threatening at present.

- In Europe, prior to the capitulation of equities, MNI-Pi (positioning

indicator) shows very short positions in Schatz and Bobls, small shorts in Bunds

but flat positions in Eurobuxl, BTP and Gilts. There were very small shorts in

OATs.