T-Notes operate at session highs, after.....>

US TSYS: T-Notes operate at session highs, after sticking to a relatively tight

range overnight with the cash space closed in Asia-Pac hours owing to the

Japanese holidays

- Softer than expected Chinese PMI data supported the space (some would argue

the moderation was to be exp. after the effects of the LNY and credit impulse

faded), and it is also worth highlighting that the U.S. Tsy revealed lower than

exp. Q2 borrowing requirements late Monday.

- Eurodollar futures trade unchanged to 3.0 ticks higher through the reds.

- Chicago PMI & labour cost data headline the local docket today, with consumer

confidence also due.

- T-Notes last 123.21, 10-Year cash Tsy yields closed at 2.525%.