Early buying flow in TYZ9 supported Tsys,...>

US TSYS: Early buying flow in TYZ9 supported Tsys, although a sharp drop in JGBs

dragged T-Notes away from highs as we moved towards London hours. Contract last

+0-04 at 129-01+, with yields 0.8-1.3bp lower across the curve. A block trade

was seen in the long end in late Asia hours: 5.0K USZ9 159/158 put spreads sold

at 0-34 vs. 7.5K USF0 157/155/153 put ladders bought for 0-25. A source noted a

"similar amount of premium for both trades, appears a/c is rolling out their

downside exposure."

- Headline flow was light, with some focus on regional U.S. voting matters,

although the outcomes have provided little volatility for the space. Elsewhere,

Eurodollar futures print 1.0-2.0 ticks higher through the reds. Block activity

was also noted here: 0EG0 98.625/98.750/98.875 call ladder 40.0K bought on block

at 0, while 30.0K of the 0EF0 98.500/98.375 put spread was sold on block at 5.5.

- Fed speak from Kashkari & Kaplan has offered little new over the last 12 hours

or so.

- Fed's Williams, Evans & Harker all due Wednesday, 10-Year supply also slated.

N.B. Tuesday's concession made for a solid round of 3-Year supply.