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Tsy futures trading steady/mixed,......>

US TSY FLOWS
US TSY FLOWS: Tsy futures trading steady/mixed, near middle narrow overnight
range on very light overnight volume (TYU w/100k so far). Equities weaker (emini
-3.5, 2474.00), gold higher (+1265.05, +7.15), oil steady (WTI 49.39, +0.00).
- Asia, Tsys traded mildly higher in early Asian hours, light volume/narrow
range amid some Asian holidays. Sources reported light foreign central bank
buying in 2s, sellers in TYU at 126-05.5, Asia regional banks sold Tsys across
curve (auction hedges?) China trade surplus widened for a fifth straight month;
Japan's Nikkei stock index settled down .0.3%.
- London, muted summer trade continued. Sources reported light end user buying
5s, 10s and 30s. USD weaker vs. Yen lending some mild support for Tsys.
- Swaps, running steady to mildly wider amid light deal-tied paying, more
high-grade supply should keep lid on spds after nearly $15B priced Monday.
- Eurodollars, steady to mildly higher in the short end, weaker out the strip;
3M LIBOR -0.0020 to 1.3094% (-0.0024/wk). Dec rate hike probability 40.8% (MNI
PINCH).

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