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US TSY OPTIONS

BLOCK, 10Y Put Sale

FED

Reverse Repo Operation, New Record High

BOND SUMMARY
BOND SUMMARY: In Europe, long-end Bunds weakened and the rates future strip bear
steepened as hawkish commentary from ECB's Praet and Weidmann fuelled
speculation that next week's ECB Governing Council meeting could deliver an
announcement on winding down QE.
- Italy's relief rally is looking short-lived, as ECB tightening and the new
government`s economic policies are perceived as significant risks to debt
sustainability. 2Y BTP yields are up 29bps at 1.299% and 10s up 14.5bps at
2.935%, leading to major curve flattening (2s10s down from 178bps to 163bps).
- 10Y Bund yields up 5.4bps at 0.443%. UK Gilts following suit (up 5bps at
1.334%), amid newswire reports of Labour shifting its position to a more soft
Brexit likely weighing as well despite it putting more pressure in PM May.
- This bearish shift in Europe is translating to similar moves in USTsys and
JGBs.  10Y UST yield is up 1.3bps at 2.942%, with the 2s10s curve steepening
0.5bps to 43.7bps. JGB June futures are off 3 ticks at 150.81.
- Bearish steepening across rate strips. Green and Blue contracts lower in:
Euribor off 5-5.5 ticks, Short Sterling off 3-4 ticks, Eurodollar off 2-2.5.