Tsys trade mixed by the bell, long.....>

US TSY FLOWS: Tsys trade mixed by the bell, long end weak but off overnight

lows, curves steepening out. Rather light session volume, much occurring during

London and cross-over to NY hours. 

- Equities firmer but paring gains (SPX currently +11.0, 2506.0). US$ index

mildly lower (DXY -.114 at 96.367). US$/Yen lower, -.67 at 110.34.

- Tsys gradually chopped higher all session, pared gains ahead midday when

equities looked to resume rout before recovering later in session. Two-way

positioning, modest month end extension trade, option-tied hedging helping keep

levels in range.

-  Swap spds mildly wider for the most part by the bell, long end on session

narrows. Decent volume on earlier moves with better paying in short end (1Y at

2.76378%, large $1B payer in 2s around 2.686%-2.6945%, near $750M payer in 5s

from 2.6550%-2.63728%, light receiving in 6s-7s, 2s3s5s payer fly.

- Decent option volume, mostly buyers of low delta puts in near end

- Tsy cash/ylds: 2Y 99-30.25 (2.526%), 5Y 100-09.25 (2.561%), 10Y 103-13.5

(2.725%), 30Y 106-18 (3.038%)