The Treasury curve is lower this....>

US TSYS SUMMARY: The Treasury curve is lower this morning, the 10Y UST yield has

shed 0.9bp to 2.65%. However, the path of the swap curve is at odds with

Treasury movements and the 10Y swap curve is just over 2bp lower leading to a

1.25bp fade of the swap spread widening movement seen late last week on the back

of the government shutdown. The 10Y swap spread is currently +4.5bp. Swap

volumes have been elevated on the SEFs.

- The US shutdown enters its first working day although there is a key Senate

vote scheduled for around noon Eastern time that would fund the government for

three weeks. However, it is unclear whether the plan will attract enough

Democrat Senators.

- The data schedule is fairly limited today with only the Chicago Fed National

Activity Index. Tomorrow, will see the start of the 2Y, 5Y & 7Y auctions, which

will be far more difficult to call because of the impasse in DC.

- In FX markets, the dollar has weakened since the start of the European open,

with the EURUSD back to 1.225.