Tsys trade broadly lower in.........>

US TSYS SUMMARY: Tsys trade broadly lower in second half, bumping around low end

broad range, heavier futures volume for typically quiet summer trade (TYU>1.2M);

30YY tapped 3.099%, mid-June highs. Quiet start w/Fed in blackout through Aug 2,

limited data w/existing home sales (5.38M), 13- and 26W bill auctions. Heavy

earnings wk, >500 co's reporting.

- Less a risk-on move than buyers making themselves absent amid thin

market/summer conditions. Moderate sell interest hits air pocket, triggering

some sell-stops on the way down, curve flattener unwinds by weaker hands (2s10s

near 10bp steeper from last Thu set's, 5s30s appr 5.5 steeper). Sources noted

couple rounds of block sales in Sep Bunds; rebound in US$ index (+.109 to 94.584

vs. 94.207L) and US$/Yen contributed (+.05, 111.47 vs. 110.75L). Tsy Block,

+5,378 WNU, 156-21 -- large buy-through from 156-16 post time offer

- Equities rebound (emini +5.0, 2805.75); gold remains soft (XAU -6.42,

1225.48); West Texas crude weaker/revering early bid (WTI -0.5, 67.76). Tsy

cash/ylds: 2Y 99-24.25 (2.625%), 5Y 99-03.25 (2.819%), 10Y 99-09 (2.958%), 30Y

100-19 (3.094%).