Tsys sliding, pressured as cash 10-yr.......>

US TSYS: Tsys sliding, pressured as cash 10-yr note breaks over 2.40% key level;

sustained break on closing basis cld suggest turn to bearish mood. "The key

10-yr support is right around 2.40% which is approx 5/8 retracement of the 2.63

to 2.01% yield range," said independent buyside analyst Sadakichi Robbins.

- "The 2.40% also marks the top of the shorter term 2.30-2.40 range," he added.

"A break above puts the 2017 high of 2.63% in play, but as long as both the

5/5yr forward swaps and TIPS breakevens remain ensconced in their trends,

coupled with benign volatility, there is little concern for a major bear

breakout to much higher yields."

- "The recent bearish steepening in the curve should also help maintain bid for

risk and MBS assets, thus drawing out buyers as yields rise," he added. "It will

take a firm break below 2.30% yield to reverse bearish pressures temporarily and

finally a rally through 2.25% and finally 2.19% to ignite a shortcovering bull

move with legs. Exogenous geopolitical and budgetary surprises of course could

create outliers to expected outcomes, but fundamental underpinnings in the

economy should hold over medium term."