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Tsys still weaker but well off......>

US TSYS SUMMARY
US TSYS SUMMARY: Tsys still weaker but well off lows post ADP (+178k; Apr rev'n
+163). Tsys had reversed appr two-thirds of Tue's risk-off/safe-haven rally as
Italy remains in focus -- decent Italian BTP/CCTEU auction performance (and
higher flash inflation data from German regions and Spain) helped narrow
peripheral spds (Italy 10Y vs. Bunds -40.1, Spain -18.9. Portugal -23.9, Greece
-29.2). Tsy Yld curves sharply flatter after mixed open, lvls still off mid-May
multi-yr lows.
- USD index giving back (DXY -0.718, 94.102; US$ vs. Yen +0.17, 108.94); stocks
rebound (emini +35.5, 2727.75); gold firmer (XAU +2.72, 1301.59); West Texas
crude bounce (WTI +1.57 to 68.30).
- Decent flow still well off Tue's heavy pace w/real$ and bank portfolios
selling intermediates and long end earlier, two-way by late morning w/fast and
real$ across the curve, flatteners in 2s and 5s vs. 30s, Tsy futures roll volume
slows ahead Thu final notice. Cautious positioning ahead Fri's May NFP.
- Tsy cash/ylds: 2Y 100-05 (2.415%), 5Y 100-10.25 (2.679%), 10Y 100-06 (2.851%),
30Y 101-29 (3.027%).

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