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Tsys trade weaker, curves flatter...>

US TSYS SUMMARY
US TSYS SUMMARY: Tsys trade weaker, curves flatter amid a second consecutive
session of relief for Italian bonds (2Y vs. Bunds -44.1, 5Y -31.1), peripherals
tighter as well. Bunds outperforming Tsys despite better than expected European
CPI (after higher flash inflation data from German regions and Spain yesterday).
USD index softer (DXY -0.244, 93.825; US$ vs. Yen -0.09, 108.82); stocks little
higher (emini +1.0, 2725.5); gold firmer (XAU +3.91, 1305.31); West Texas crude
weaker (WTI -0.60 to 67.61).
- Asia, Tsys rebounded after mildly weaker open, chopped in narrow range amid
two-way flow in the intermediates before selling off in lead-up to London trade.
- London, continued to trade weaker amid ongoing focus on Italy/improved
peripherals, ongoing two-way in 5s-10s w/better selling in 10s and 30s, 5s/30s
flatteners. Sep Tsy futures takes lead. Swap spds wider/spd curve flatter amid
better paying in 2s-5s. Eurodollar futures weaker, additional rate hikes after
June continue to rebound
- Tsy cash/ylds: 2Y 100-03.75 (2.435%), 5Y 100-07 (2.701%), 10Y 100-02 (2.868%),
30Y 101-26 (3.031%).

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