Follow through decline in Tsy ylds.....>

US TSY FLOWS: Follow through decline in Tsy ylds (10YY 2.520%), futures drifting

around top end of range as trade volumes climb back to normal levels

(TYM>1.17M). Yld curves mostly steeper, 3M10Y appr another 3bp flatter -- -5bp

from Mon highs.

- Tsys ground higher/followed Bund lead in first half as 10Y Bund fell back into

negative territory, levelling out in second half but remained well bid. Better

buying in intermediates from prop and real$, dal-tied selling in 3s, 5s and 10s,

prop, dealer acct selling short end.

- Right on the screws: U.S. TSY $41B 5Y note auction (9128286R6) awarded 2.315%

rate vs. 2.315% WI (awarded 2.172% in Mar; 2.527% avg), bid/cover 2.44 vs. 2.35

previous (2.49 avg).

- On tap for Thursday: On tap for Thursday: Weekly jobless claims; March durable

goods; housing vacancies rate; Kansas City Fed Mfg Index. U.S. TSY $32B 7Y note

auction (9128286S4).

- The 2-Yr yield is down 4.6bps at 2.3178%, 5-Yr is down 4.6bps at 2.3136%,

10-Yr is down 4.3bps at 2.5217%, and 30-Yr is down 3.9bps at 2.9406%.