Fairly sedate for Treasuries in.....>

US TSYS SUMMARY: Fairly sedate for Treasuries in the early going Tuesday. 

- Market buzz is all about any follow-through from Monday's overnight

collateralised funding dislocations (see our note earlier).

- BoAML said in earlier note O/N GC repo is expected to open at 3.5% today. Also

watch EFFR which Wrightson ICAP said could exceed 2.25% (top end of Fed`s target

range), thus spurring Fed to initiate overnight repo operations.

- These dislocations may come into consideration by the FOMC as their two-day

meeting begins, given potential effect on monetary policy transmission.

- If you missed our FOMC preview, get in touch.

- Meanwhile, August IP data out at 0915ET (est +0.2%, -0.2% prior).

- Looking at levels, Dec 10-Yr futures (TY) up 4/32 at 129-6 (L: 128-31 / H:

129-09), amid fairly choppy, directionless trade.

- Tsy curve flatter: 2-Yr yield is down 1.4bps at 1.7453%, 5-Yr is down 2bps at

1.6793%, 10-Yr is down 2.6bps at 1.8205%, and 30-Yr is down 2.9bps at 2.2898%.