Reversion to the day's mean, levels....>

US TSY FLOWS: Reversion to the day's mean, levels gradually receded through the

second half to near middle session range afterthe bell amid better volume than

the first 3 days of week w/ TYZ>1.1M.

- Quiet 2-way trade, positioning ahead weekend, while the surprise $6.5B Wells

Fargo issuance weighed on intermediates late. Yld curves were marginally steeper

for most part (3M10Y little flatter).

- Tsys extended session highs after making new session lows in early trade

(brief dip on stronger than exp Markit U.S. Manufacturing PMI: 51.5 vs 50.9exp).

No one specific driver for apparent risk-off move though several TYZ block/buy

throughs provided some impetus on way while EGBs made similar gains.

- Third strong auction in a row, US Tsy $32B 7Y Note auction (912828YQ7) awarded

1.657% rate vs. 1.664% WI (previous $32B 7Y awarded 1.633%); 2.46 bid/cover vs.

2.49 prior. Indirects drew 65.4420% vs. 65.20% prior, directs 14.49% vs. 14.60%,

dealers 20.07%.

- The 2-Yr yield is down 0.4bps at 1.5777%, 5-Yr is down 0.6bps at 1.5848%,

10-Yr is down 0.2bps at 1.7625%, and 30-Yr is up 0.1bps at 2.2557%.