Treasury yields are marginally......>

US TSYS SUMMARY: Treasury yields are marginally lower on Monday but lack much in

the way of direction and, not surprisingly, volumes are quite low. The 2Y yield

was last at 1.82%, down 0.2bp from Friday and the 10Y yield is at 2.338%, down

0.5bp.

- Initially, Treasury markets benefitted from the failure of Merkel to secure a

coalition at the weekend. This news pushed Bunds higher but they quickly

surrendered the gains. 

- The tax reform bill is suffering some push-back from moderate Senate

Republicans looking to stabilise Obamacare, hoping for a bi-partisan solution to

healthcare. 

- On Friday evening, the CFTC released a fresh Commitment of Traders report.

Given that the year is approaching its close, attention on the dealer

positioning should increase and the report shows dealers increasing their long

position in eurodollars to new records.

- Short-dated swap spreads shows the only movement along the curve with the 2Y

0.3bp wider and is, perhaps, a reaction to the CoT data.