*** Treasuries rise on.................>

US TSY FLOWS: *** Treasuries rise on short-covering, technical buying as 10Y Yld

2.248%, breaking 2.251% Aug. 1 low yield and near 2.247% 55-day moving average.

"Decent" 2way activity in front end.

- Early brisk buying in Tsy futures esp. 10Y futures (77K traded after initial

refunding anncmt) then 22K sold down to 125-31+ in profit-taking. Then about

10,000 USU Classic Bond futurs bought from 153-23 to -27, while 30K FVU 5Y

futures traded in uptick from 118-04.5 to -07.5. Then more bought, 9,500 in TYU

at 8:50am ET at 125-31.5 while 7,483 bought in WNU Ultra Bonds, plus 50K TYU

bought on upward spike.

- Cash Tsys saw 2/30Y, 5/30Y flatteners as Tsy Aug refunding news did not

mention possible Ultra bonds; mild midmorning flattener unwinds since briefing

said Tsy still studying Ultra Bonds but no stop-or-go decision date, so they are

way off in future even if idea does come to fruition, and it may not, as some

dealers underwhelmed by idea. "They said they were looking still" at Ultras but

"it's nothing imminent," said a trader. "Bond contracts are leading the way

upward: The quiet bid in the bond contracts is supporting the mkt."