There are repeating patterns in.....>

US TSYS SUMMARY: There are repeating patterns in the US Treasury market, with

yields tending to modestly decline while European are present but rising when

the US traders come in.  rose for almost the entire American trading session but

stopped as US traders went home. This happened Friday, yesterday and US 10Y

yields have dipped slightly in Europe today.

- Currently, the 2Y yield is 0.2bp higher at 1.683% (near nine year high) and

the 10Y yield is down 0.7bp to 2.399%. The 2-10Y curve is down to 71.5bp,

stopping a little above the 68.6bp low from last week. Sources report real money

were putting on 2-10Y flattener trades in the Asian time zone.

- There has been some break-down in the close relationship between the yen/gold

and the Treasury market. In early Europe, there was a sudden explosion in gold

contract volumes that accompanied weakness in gold price and the yen but

Treasuries were very slow to react.

- The US market looks forward to PPI data later today.