T-Notes last +0-08+ at 139-04+, edging......>

US TSYS: T-Notes last +0-08+ at 139-04+, edging higher in early trade this week,

benefitting from the aforementioned supportive factors highlighted in the

earlier "MARKET TALK" bullet.

- This has allowed the contract to build on Friday's late recovery from worst

levels, which rounded off a rangebound session, limited by Asian & European

holidays. Cash trade saw modest flattening of the curve on Friday. A heavy

session for equities provided underlying support for the space on Friday, which

meant that T-Notes never strayed too far into the red.

- Also worth noting that the mechanics of the ISM m'fing release flattered the

headline (increased delivery times are usually viewed as a +ve, re: strong

demand, while this clearly doesn't hold true for the present increase).

- Elsewhere, the latest tweak to the Fed's Tsy purchases (down to $8bn/day from

$10bn) saw little in the way of market reaction.

- A reminder that cash Tsys will be closed Monday through Wednesday during Asia

hours, owing to Japanese holidays.

- Eurodollar futures sit 0.5-1.5 ticks higher through the reds, bull flattening.