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Tsys surged late, blowing past......>

US TSYS SUMMARY
US TSYS SUMMARY: Tsys surged late, blowing past late overnight highs in last
hour of trade; Tsy ylds tumble, 10YY 2.785%. Poor liquidity on return from
extended holiday, others plying sidelines ahead heavy data this wk, NFP Fri
(+194k est).
- USD index higher (DXY +0.382, 94.880; US$ vs. Yen -0.98, 108.44); stocks
crushed (emini -42.0, 2676.25); gold firmer (XAU +4.93, 1303.03). West Texas
crude adding to last wk's rout (WTI -1.19 to 66.69).
- Rate rally overdone if only reacting to Italian political risk that spurred
heavy safe-haven/risk-off buying in Bunds and Tsys. No deal-tied flow, HEAVY
Jun/Sep futures rolling inflating volume (TYM>4.9M; TYM/TYU>1.8M), heavy option
volume favoring upside calls/bull spds. Vol index VIX climbs to 18.33. Rate hike
probability retreating, June only 72%, w/Dec close second at 64% after both
tapped 100% last wk.
- Tsy cash/ylds: 2Y 100-10.5 (2.327%), 5Y 100-22.75 (2.596%), 10Y 100-24.5
(2.785%), 30Y 102-26 (2.981%).

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