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Strong sell-off in Tsys,............>

US TSYS SUMMARY
US TSYS SUMMARY: Strong sell-off in Tsys, reversing appr two-thirds of Tue's
risk-off/safe-haven rally as Italy remains in focus. Not an all-clear for
political uncertainty that rocked mkts yesterday, but decent Italian BTP/CCTEU
auction performance (and higher flash inflation data from German regions and
Spain) helping narrow peripheral spds (Italy 10Y vs. Bunds -39.6, Spain -15.8.
Portugal -18.6, Greece -30.2).
- USD index lower (DXY -0.492, 94.328; US$ vs. Yen +0.16, 108.92); stocks firmer
(emini +13.25, 2705.5); gold softer (XAU -0.58, 1298.27); West Texas crude
little firmer (WTI +0.28 to 67.01).
- Asia/London, Tsys traded steady/firmer early, chopped lower through London
hours as Italian debt recovered some ground. Decent two-way flow in 5s and 10s
fast- and real$, latter better net sellers w/bank portfolios, insurance selling
out the curve. Swap spds mixed, spd curve steeper, receivers/payer unwinds in
2s-5s. Eurodollar futures also broadly lower, reversing fair amt Tue's rally.
- Tsy cash/ylds: 2Y 100-05.5 (2.409%), 5Y 100-08.25 (2.691%), 10Y 100-00
(2.873%), 30Y 101-15.5 (3.047%).

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