*** Tsys trading higher, but well...>

US TSYS SUMMARY: *** Tsys trading higher, but well off first half/session highs.

Geopol concerns never far from front burner these days, EGBs/Tsys traded broadly

higher earlier, concerted safe haven bid for risk-off assets following N Korea

missile launch that flew over northern Japan.

- Tsy futures gradually worked off session highs as USD bounced off lows, higher

vs. Yen recently, equities rebounded. Source noted appr +6,000 S&P 500 futures

at 1043:354ET (big, not emini), not an endorsement for risk-on Gold still well

bid/off highs (+6.86, 1315.22). 

- Healthy buying cash, futures in belly; profit-taking on firmer Conf Board

cons/conf, 122.9; pre-auction hedging, strong $28B 7Y auction, stopped thru

1.941%, drew strong 68.8% indirects.

- Tsy futures volume remains healthy w/Sep/Dec roll activity ahead Thu's first

notice. Option trade saw better upside call spd buying on net, w/decent put

buying near highs in the underlying. Implieds have receded from earlier highs.

- Swap spds mildly wider (2and 5yr roll adjusted) two-way in 2s-5s, paying in 7s

and 10s.