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

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).