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Tsys trading broadly lower,.........>

US TSYS SUMMARY
US TSYS SUMMARY: Tsys trading broadly lower, at/near recent overnight lows, very
heavy futures volume (TYH>830k), ylds surging/breaking range (2Y 2.144% +.0281,
Sep'08 lvl; 10Y 2.718 +.058) despite month end extensions and potential for
large pension rebalancing out of equities into Tsys. Going to be a busy week
w/POTUS State of Union Tue, Tsy refunding annc and FOMC Wed, NFP Fri. Equities
slipping (emini -8.5, 2866.0), gold weaker (XAU -6.75, 1342.95), oil softer (WTI
-.45, 65.69).
- Asia, Tsys opened steady/mixed, brief early bid followed by steady selling
into London crossover. Some curve flattener unwinds from fast$.
- London, renewed selling, some option and supply related hedging, macro-fund
selling 10s, central bank buying in 2s, negative convexity acct selling
- Swaps,Spds running mixed, spd curve mildly flatter in face of bear steepening
in Tsys. Flow included bank portfolio receiving in 2s and paying in 7s, fast$
receiving in intermediates.
- Eurodollar futures, broadly lower across strip, EDZ8 and EDZ9 lead volume
sales; 3M LIBOR +0.0053 to 1.7722% (+0.0224/wk). 

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