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*** Tsy futures trading weaker,.....>

US TSYS SUMMARY
US TSYS SUMMARY: *** Tsy futures trading weaker, off lows in the lead-up to the
3Yr note auction. Rates gravitated off late morning lows amid risk-off bid
(partially tied to concerns over N Korea nuclear capability), that in turn
helped Yen regain some ground vs. USD after latter surged couple hours ago.
- Tsy futures traded steady/mixed, near middle narrow overnight range on very
light overnight volume into the open, limited second tier data and no Fed
speakers to roil the summer calm.
- FX-accts also weighed on Tsys as USD reversed early gains vs. Yen. Flow
included modest bank portfolio and real$ sellers in 10s and 30s, prop on small
5- and 10Y vs. 30Y steepeners. 
- Deal-tied hedging and pre-auction short sets, former after near $15B placed on
Mon. Large multi tranche issue from British American Tobacco (BAT), others on
watch for potential Apple (AAPL) issuance.
- Some swap accts looking at spd curve steepeners in front end vs.
intermediates.
- Overnight repo, ongoing demand for 2-, 3-, 5- and 10s

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