Tsy yields directionally weaker.....>

US TSYS SUMMARY: Tsy yields directionally weaker w/softer US$ this morning (30YY

still >3.09%, 10YY around 2.95) and wider sovereign spds (BTP/Bund 10Y +5.8);

Tsy futures near top of range, decent volume (TYU>335k), curves mildly steeper

adding to 2-day rebound off 10Y lows. Data on tap includes FHFA Home Prices,

Markit Srvcs/Mfg, $35B 2Y note auction.

- US$ index little weaker: DXY -0.132 to 94.500; US$/Yen -.25 to 111.09

(111.51H/111.01L); equities firmer (emini +7.0, 2819.0); gold firm (XAU +3.34,

1227.83); West Texas crude firmer (WTI +0.32, 68.21). 

- Asia/London session flow, initial two-way followed by better real$ buying.

Support continued through London cross w/ various foreign real$ buyers 2s-10s,

pre-auction and corp-deal-tied hedging.

- Eurodlr futures, front end buying few minutes after weaker 3M LIBOR set lifted

lead quarterly (EDU8) +0.020 to 97.585. Swaps, spds running mildly tighter

across the curve, receiver in 7s at 2.96%, 2s5s10s fly/receiving belly, real$

paying long end. Tsy cash/ylds: 2Y 99-24.12 (2.629%), 5Y 99-03.5 (2.818%), 10Y

99-09.5 (2.956%), 30Y 100-20 (3.092%).