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

US TSY FLOWS: Tsy futures trading mildly weaker, at/near late overnight lows in

long end, light volume (TYH<205k). US$ little weaker (vs. Yen, 113.469),

equities firmer (emini +3.0, 2667.5), gold mildly higher (XAU +0.76, 1242.71),

oil firmer (WTI +0.47, 58.46). Start of 2-day FOMC while US has Alabama Senate

election to preoccupy.

- Asia, Tsys opened mildly weaker, recovering to trade mildly higher into London

crossover. Flow included Asian central bank buying in 5s and 7s, misc acct

buying out the curve.

- London, Tsys pared gains as EGBs softened, outperforming Bunds and Gilts.

Sources reported end user buying in intermediates, bank selling in 7s, mild long

end buying early, bank portfolios in 30s.

- Swaps, spds running steady to mildly wider in the intermediates. Recent flow

includes 4s5s flattener ($89.7k DV01), and $177.8k 4s5s10s fly -- receiving 5s.

- Eurodollar futures, trading weaker in Whites through Blues (EDZ7-EDU1), Golds

mildly outperforming. Light volume, renewed EDZ7 seller post 3M LIBOR set

(+0.0100 to 1.5735%, +0.0247/wk).Dec futures and options expire Friday.