Early chop as risk-off tone pared......>

US TSY FLOWS: Early chop as risk-off tone pared into midmorning, Tsys gained as

equities quickly trimmed gains after the open (possibly due to ongoing sanction

rhetoric between US/China). Rates held near highs on relative narrow range

through the NY close -- but support evaporating as stocks surge again into the

close. Ongoing heavy Tsy futures volumes tied to Jun/Sep futures roll w/Sep

taking lead Friday.

- Yld curve control from Fed on some minds (Williams/voter, Bullard/non-voter).

Williams earlier on Bbg re: economic trough, May/June will be the low point

based on what we've seen; significant rebound in 2nd half.

- Weak US Tsy $45B 5Y Note auction (912828ZT0) tailed 1.2bp w/award rate of

0.334% (0.394% last month) vs. 0.322% WI; 2.28 bid/cover vs. 2.74 prior.

Indirects drew 57.34% vs. 60.45% prior, directs 10.83% vs. 20.20% prior, dealers

31.83% vs. 19.36% prior.

- The 2-Yr yield is up 0.8bps at 0.1799%, 5-Yr is down 0.6bps at 0.3414%, 10-Yr

is down 1.8bps at 0.6786%, and 30-Yr is down 0.7bps at 1.4373%.