*** Early trade update * Update,.....>

US TSY OPTIONS: *** Early trade update

* Update, total -50,000 FVK 115.5/116 call spds at 4.5/64 on screen. Background

on trade: paper had bought 50k FVK 114.5/116 call spds at 23.5/64 last Wednesday

-- today's sale rolling down the top strike/lowering the spd and cost basis.

Last couple weeks rather heavy upside call and call spread buying in 5- and 10Y

Tsy options indicative of a slow-down, hedging for potential rate cuts. Today's

roll-down sale (call buyers taking foot of the pedal in general and modest

pick-up in put buyers) implies a softening of upside expectations -- more range

trade and lower vol going into summer trade. Meanwhile, earlier screen trade

included

* 3,000 FVJ 115/115.25 call spds vs. 114.25 puts

* >10,000 TYJ 123 calls, 7- to 8/64