The Treasury market has declined....>

US TSYS SUMMARY: The Treasury market has declined quite rapidly and relative to

the NY close and the 5-7Y section of the curve is leading the move higher with a

4bp yield rise. The worst performing liquid security is the CTD into the TY

contract, the UST 2.375% Aug-24 i.e. the sell-off is futures-led. there has been

ample volumes in the futures market overnight.

- The Treasury market weakness is linked to a risk-on feel to financial markets

this morning and is in complete contrast to the panicky dips started by the Hang

Seng index yesterday that then spilled into other markets. Strong European

company earnings report have aided that movement.

- Furthermore, the Senate passed the passed its budget bill 51-49 and without

the need for Democrat support. It was a critical hurdle. 

- The swap spread curve has flattened fairly aggressively, with the 2Y spread up

0.5bp to 25.2bp and the 30Y spread is down 0.5bp to -30.5bp.

- USD swaps are showing some steepener trades in the front end of the yield

curve.