In the overnight session, the.......>

US TSYS SUMMARY: In the overnight session, the Treasury market started to soften

and the initial motivation was the weakening of the yen in response to dovish

comments by BoJ member Sakurai.

- Thereafter, Treasuries developed their own momentum downwards but always

moving in a consistent way with the yen. 

- Soon after slightly stronger than expected UK wage data, 40k TY contracts

traded and one trade of 5k eventually showed up as a block trade. A second leg

lower showed up around half an hour later on heavy volumes as stop-losses were

being triggered.

- Activity was futures-led and the 7Y tenor (close to the TY CTD) was the

weakest on the curve. 

- There was some small paying in swaps and 5-10Y steepeners along the swap

curve, after all the 5-10Y and 5-30Y UST curve hit multi-year levels of flatness

yesterday.

- Currently, the 2Y yield is +2bp at 1.567%, the 10Y +2.7bp at 2.327%. Swap

spreads are close to unchanged.