The long end of the Treasury........>

US TSYS SUMMARY: The long end of the Treasury market was pummelled last week and

early Asian trade saw more of the same, rising T-Bond yields and weakening

equity markets. 

- By contrast, there was some buying in the front end of the US curve as the

weakness in equities is seen as favouring a slower path of rates but not a

reversal in the reversal of QE. Curve steepening has been quite dramatic.

- By the time European markets opened, the selling of the 30Y had ceased and

EGBs caught a strong bid. However, a block trade that sold 30Y German eurobuxl

futures against the US 30Y Ultra was noted at 0827GMT.

- The dollar trade-weighted index has remained fairly stable through the most

recent 12 hours. However, the S&P mini index future has recovered and points to

only a 0.2% decline at the open of US trade later.

- Currently, the 2Y yield is down 0.8bp at 2.133% but the 10Y is +0.4bp at

2.845% and the 30Y is sitting 1.6bp higher.