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

US TSYS SUMMARY: *** Tsy futures trading weaker heading into the 5Y note

auction, well off first half lows to near middle session range into midday on

heavy volume (TYZ>1.60M); 10Y yld holding above 2.4% at 2.4335% at moment vs.

2.4736% session high. 

- Tsys traded weaker w/Bunds on the open (pressure from Germany 10Y issuance and

firmer German Ifo data and weaker UK Gilts after UK GDP data). Stronger US$ vs.

Yen earlier (114.112) added to selling. Otherwise, sidelined accts ahead Thu ECB

policy/taper annc and word from U.S. pres on Fed chair appt (chatter from

Politico item, may not hear appt this week).

- Rates made new lows post Sep durable goods new orders +2.2%, stops triggered

on way down after brief fast$ buying, corporate debt and pre-auction short

setting weighed; real$, bank and insurance portfolio selling subsided by

midmorning.

- Rebound in Yen vs. US$ helped reverse rate sell-off as did steep sell-off in

U.S. equities, several decent sell-programs noted amid talk of asset allocation

out of stocks into equities as ylds vs. dividends debated.