Equities are bonds have headed......>

US TSYS SUMMARY: Equities are bonds have headed lower on Wednesday, which

suggests that the market is looking more and the end of the QE trade or heavy

debt supply rather than any risk-on or risk-off scenario. The US Treasury curve

is bear steepening, with the old 2Y yield 0.5bp higher but the 10Y UST +1.7bp at

2.63%. The freshly issued 2Y appears to be trading heavily in London trading.

- Swap spreads have further faded their spike from last week that was caused by

hopes of a change to leverage ratio moves. the 30Y swap spread has narrowed 1bp

to -14.5bp today.

- On the data side, there is existing homes sales data alongside a number of

second tier releases.

- Of more interest for the UST market today is that the Treasury sells USD15bln

of the 2Y FRN at 1130ET and USD34bln of the 5Y note at 1500ET.