There was little movement in the....>

US TSYS SUMMARY: There was little movement in the Asian session for the Treasury

market although pension and life insurance buying of 30Y paper was reported to

us overnight.

- Activity really picked up in the European time zone when the Italian market

hit a speed bump that sent the BTP market plummeting and the core EGB markets

flying higher. That rally dragged Treasury prices higher, shaving 2bp from the

10Y UST yield to 2.90%. The US curve flattened in the process. 

- The volatile but generally lower repo rates in February reversed yesterday.

Generally speaking larger dealer balance sheets are reducing costs of

intermediation and the GCF-tri-party repo spread is collapsing.

- There are no data releases today but Dudley (dove) and Rosengren (hawk) speak

on a panel about the Fed's balance sheet at 1515GMT. Mester (hawk) is talking at

1830GMT and Williams (hawk) at 2040GMT. More importantly, the Fed will release

its Monetary Policy Report to Congress at 1600GMT ahead of the 'Humphrey-Hawkins

by Powell next week.