Tsy futures trading weaker w/Bunds.....>

US TSY FLOWS: Tsy futures trading weaker w/Bunds and Gilts, curve steeper

w/futures off recent lows on moderate volume (TYZ>270k). Mild unwind, position

squaring ahead Fed chair Yellen open remarks at banking conf in St Louis Wed at

1515ET, and Fri's NFP (+73k est). Equities firmer (emini +1.5, 2527.75), gold

little weaker (-0.23, 1270.70), oil weaker (WTI -0.14, 50.44).

- Asia, Tsys inched lower after steady/mixed open. Flow included Asian central

bank buying short end, real$ selling intermediates, particularly 10s with $mngr

and Japanese insurance portfolio selling as well. Hong Kong back from Mon

holiday, Hang Seng surge >3%, China bank shares outperform after reserve

requirement ratio cut for some banks (annc Sunday).

- London, two-way flow early w/TYZ bounce to steady before selling off again.

Flow included real$ and foreign central bank buying 2s and 3s, Asian bank and

real$ bought 5s, credit-tied sales 10s with prop and option-tied sales,

deal-tied hedging weighing.

- Swaps, spds mixed, spd curve flatter amid 2-way curve flow.

- Eurodollars, mildly weaker, short end outperforming.