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

US TSY FLOWS
US TSY FLOWS: Tsy futures trading weaker, gradually extending overnight lows
over last three hours, bit of a cautious risk-on move w/equities rebounding
after last week's equity rout. US$ index firmer (DXY +.082 to 96.441) US$/Yen
making gaining .48 to 112.39.
- Busy data week -- picks up in second half w/ADP private employ, PMI, and Oct
NFP. Today's news, however, out of Germany w/reports that Chancellor Angela
Merkel will step down as head of the CDU, Bunds sold off w/Tsys in tow.
Sovereign spds narrow significantly (BTP/Bund 5Y -22.1).
- Early overnight flow included better buying in 10s and 30s during Asia hours,
pick-up in sellers of 2s and 5s in crossover to London trade. Better than avg
volume in TYZ (>570k) w/prop and real$ sellers in 10s during London hours,
chatter of asset allocation paring Tsys and adding equities.
- LIBOR set up shortly, delayed in states by an hour this week after London
rolled back the clock.
- Tsy cash/ylds: 2Y 100-03 (2.822%), 5Y 99-23.5 (2.931%), 10Y 98-04 (3.096%),
30Y 93-26.5 (3.327%).

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