Treasuries were under heavy.........>

US TSYS SUMMARY: Treasuries were under heavy supply pressure yesterday, tugged

lower by a weak EGB market. The  move was fairly brutal as the 10Y pushed above

2.50% and beyond. JGBs also weakened in overnight trade despite a so-so auction.

- In Asia, there was a subtle risk-off movement as equities and the yen

responded via normal correlations to the movement in USTs. There were big

sellers in the TY contract from around 0400GMT and the strongly prevalent trade

in the swap market is the flattener. It can be added that these flatteners are

new trades, judging by their expiry dates.

- However, European markets started rallying as the plethora of syndicated deals

attracted large books and the upward move in EGBs has spilled over into slightly

lower Treasury yields today. The 10Y was last 0.7bp lower at 2.546%.

- However, there has been a habit of European debt markets strengthening, only

for the US debt markets to sell-off. 

- The main event today will be the $20bln of 10Y notes on sale at 1300 Eastern.

There is little data.