The 10Y Treasury yields is 3.2bp....>

US TSYS SUMMARY: The 10Y Treasury yields is 3.2bp higher to 2.374% from the US

close with most of the losses being shown in early European trading. Indeed, the

US Treasury market has largely carved its own direction and the spread to Bunds

widened by 2bp to 206bp in early Europe, before clawing back nearly all of that

underperformance as the weight of early Treasury sales and swap paying subsided.

- The 10-30Y UST spread narrowed 1.3bp to 10 year lows at 37bp although it is

interesting to note that the already-much flatter 10-30Y swap spread is more

reluctant to set new lows and is currently trading at 17bp. The extremely flat

swap curve in the long end might be expected to create interesting swap spread

opportunities in the 30Y.

- With regards to swap flows there was considerable activity in 2Y tenor. There

appeared to be a large payer at just after 0800GMT that was passed around the

market. There was also a decent bullish butterfly trade in 5-7-10Y soon after

Europe opened and a good sized 5-10Y flattener around 20 minutes ago. 

- On the data front, the US markets see initial jobless claims and retail sales

later today.