The US Treasury market has..........>

US TSYS SUMMARY: The US Treasury market has weakened in European this morning

although the news flow is not the reason for it. Bunds came under earlier

pressure as the 10Y contract dropped through the 161.00 level. Selling was

futures-led as the CTD into the German contract is the worst performer on the

day. 

- In the past 20 minutes, the US market came in for its own selling and the 10Y

yield is 2bp higher at 2.368% and the 2-10Y spread is 1bp steeper at 86.8bp. 

- USD swap activity has seen most trades going through in the sub 5Y part of the

curve today, with action is two-way. There was also a 2-5Y flattener trade and a

small receiver in 10Y.

- Payrolls come later today with the market suspicious of the accuracy of the

data low because of the hurricanes. Over the past six payrolls reports we note

that selling has set in around 15 minutes after the data release.

- Tropical storm Nate is now projected to make landfall around New Orleans on

Sunday morning.