Treasury yields rose in the US......>

US TSYS SUMMARY: Treasury yields rose in the US afternoon and into the evening

but as Asia opened up, there was only Treasury buying. There was also some heavy

receiving in swaps in the 2022-2024 section of the curve.

- The initial rise in yield was linked to Catalonian news but a B-1 bomber

sortie in the area of the Korean peninsular initially aided some rally in

Treasuries. 

- The yield curve has flattened, mainly between in the 2 and 5Y sections of the

curve. The 3Y and 10Y auction set-up has been complicated by the

Catalonia-induced uncertainty and then the rally in the overnight session. 

- Swap spreads are generally tighter across the curve as we hear of Chinese bank

receiving. The swap spread curve has moved down in parallel with a 0.5-0.75bp

movement.

- The Fed's Kaplan said that the low 10Y yield levels is an 'ominous sign'.

- The market is looking forward to FOMC Minutes later today, with many looking

for answers as to what the Fed thinks of the low inflation rate.