The Treasury curve has pivoted......>

US TSYS SUMMARY: The Treasury curve has pivoted slightly today, with the 2Y

yield +0.4bp to 1.823% and the 10Y -0.4bp to 2.385%. Once again, the prevailing

trade appears to be the flattener as the market approaches the Fed decision on

Wednesday.

- European bonds have been trading lower and lower as the morning session wore

on. Treasuries have responded to this weakness and the 10Y UST yield has moved

much more rapidly than the usual correlation with the JPY would suggest. 

- Slightly stronger-than expected UK CPI data have weighed on the Gilt market. 

- Equity markets have bobbled along without really showing any direction and

suggest a close to unchanged US opening. 

- In terms of flows we heard that central banks have been buying Treasuries in

the 5-7Y sector during the Asian time zone and banks have been (uncommonly)

buying in the 30Y sector.

- In the swap market, we can see some 2Y receiver and mixed flow in the 5Y in

Europe, but good receiving of 3Y, 4Y and 5Y in Asia.

- The 30Y auction is later today, alongside NFIB and PPI.