The Treasury markets have...........>

US TSYS SUMMARY: The Treasury markets have strengthened as threats fly of

nuclear detonation over the Pacific ocean by North Korea. Asian equities were

slightly soft but also not helped by an S&P downgrade of HK to AA+ from AAA. 

- Currently, the belly of the curve is leading the way, with the TYZ7 CTD and

the current and first old 7Y providing the high water mark for performance. The

sub 2Y sector has lagged with a 1.1bp decline to 1.427%, the 10Y is 2bp lower at

2.259%. along the curve, the 10-30Y spread flattened further to 52.7bp and is

1bp from multi year lows - it will be one to watch later today.

- The decent rally of swap spreads at the front end of the Treasury curve has

been turned back slightly overnight. 2 and 5Y spreads are each 0.5bp lower on

Friday. 

- Whereas, Treasuries are performing well, the Bund is softening so the spread

is 2bp tighter at 179.4bp today. 

- Data is fairly limited today and supply does not re-start until next Tuesday.