Tsy futures trading mildly weaker......>

US TSY FLOWS: Tsy futures trading mildly weaker ahead of the Sep NFP release

(+70k est), just off late overnight lows on moderate volume (TYZ>265K), 10Y yld

at 2.370%. Equities little weaker (emini -1.0, 2549.0), gold stronger (+1.13,

1,268.55), oil weaker (WTI -0.53, 50.26).

- Asia, Tsys opened w/mild bid, trading sideways on mild two-way flow into

London crossover. Flow included leveraged acct selling on stronger US$, position

squaring from fast$ and prop accts, Asia banks bought 30s

- London, better selling in 10s in early London trade around time Bunds saw

heavy selling as German factory orders came out strong. Flow included bank

portfolio buying in 2s, ongoing two-way in 5s, extension selling in short end,

position squaring ahead data. Bonds closed Monday for Columbus Day holiday.

- Swaps, spds running steady/mixed spd curve mildly steeper amid modest two-way

flow in sub-5Y, bank receiving in 5s and paying in the belly, 2-5Y flattener and

small receiver in 10y.

- Eurodollars, trading weaker, off lows. Decent 1Y midcurve/short Mar ratio put

spds trade. 3M LIBOR +0.0017 to 1.3503% (+0.0164/wk).