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*** Thin pre-holiday markets on.....>

US TSYS SUMMARY
US TSYS SUMMARY: *** Thin pre-holiday markets on low volume (TYH<650k) has Tsys
trading mixed, long end trading strong but off recent highs. Little react to
weekly claims +20k to 245k; mkt awaiting 5Y TIPS. Small reprieve for yld curve
-- flatter after steepening all week. Latest curve update:
* 2s10s -2.746, 60.872 vs. 63.898H
* 2s30s -4.676, 96.909 vs. 101.852H
* 5s30s -4.038, 59.810 vs. 64.413H
- Early pre-leading indicator flow included real$ selling 5s and 10s, buying
off-the-run 2s and 3s, fast$ doing flatteners in 5s vs. 10s and 30s. Long end
continued to forge higher late morning with real$ buying long end futures and
cash Tsys esp. 30y bond.
- Tsys had mirrored core EGBs coming into the NY session, opened bid but pared
gains to steady/mildly lower soon after, following core EGB's lead into
midmorning. Levels rebounded w/Bunds, prop and real$ buying 10s and 30s after
fast$ selling in intermediates.
- Swap spds mildly wider light 2-way in 2s-5s, payers in 2s, flattener unwinds. 

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