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Tsys broadly higher but off midday.....>

US TSY FLOWS
US TSY FLOWS: Tsys broadly higher but off midday highs, best futures volume in
weeks (TYM>2.4k), yld curves mixed (3M10Y inverted first time since mid-2007) 2s
and 5s vs. 30Y mildly steeper.
- Kicking things off, huge German PMI miss sent Bunds sharply higher, Tsys
followed in turn, extending session highs to around midday. Rates pared gains
early in second half as equities pared losses slightly. 
- Sources noted rush of algo-lead selling in equities as the 3M10Y yld curve
inverted by midmorning, falling to new 12-year inverted low of -3.663 from 6.389
high overnight.
- Carry-over bank and real$ buying long end vs. mild prop selling, two-way
option-tied flow across the curve as the rally passed through several expiring
April option strikes. Swap-tied receiving in 5s-10s. Real$ interest in 5s30s
steepeners.
- Tsy cash/ylds: 2Y 100-10.25 (2.327%), 5Y 100-17.75 (2.254%), 10Y 101-15.5
(2.453%), 30Y 102-06.5 (2.888%).

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