*** Tsy futures see-saw to mildly...>

US TSYS SUMMARY: *** Tsy futures see-saw to mildly higher levels after slipping

to near overnight lows after the open, thin markets buffeted by deal-tied

hedging and fx-acct sales on carry-over bid for USD.

- Sources report light two-way flow on net after large block sale of 14k TYU at

126-00 sent futures tumbling briefly. Mild prop, bank portfolio buying in short

end. FX-tied selling has evaporated.

- Little react to Fed speakers: St Louis Fed Bullard w/dovish tone, expressed

concern recent weak inflation indicators could be sign it won't return to the

Fed's 2% target anytime soon. Mn Fed Kashkari : biggest US banks are still too

big to fail.

- Rate hike probability for Dec 13 FOMC holds around 40% (MNI PINCH).

- Corporate debt issuance returns, hedging adds to earlier weakness, swap spds

ratcheted tighter/spd curve holding flatter. Some desks fading spd narrowing in

the belly, outright and vs. the short end.

- Option vol started off with mild bid but has slipped back to steady/lower

w/underlying off lows to steady/mixed.