Tsys trading lower/off early........>

US TSYS SUMMARY: Tsys trading lower/off early session lows, see-sawing in

relatively narrow range into midday. Decent futures volume (TYM>1.3M) largely in

first half. Relatively quiet start to wk after 10Y yld near breach 3.0% (early

Jan 2014 lvls), currently 2.9696% vs. 2.9957% high. Second-tier data (Markit

services/mfg, existing home sales, 13- and 26W bill supply), Fed in media

blackout through May 3.

- Tsys shifted lower on easing geo-pol tension over wknd (cautious optimism over

China/US trade, Tsy Sec Mnuchin comments; N Korea acquiescing to monitoring);

US$ strength (DXY index +.555, 90.871; US$/Yen topped 108.7, early Feb highs.

- Better buying/short covering into early weakness. Flow included prop accts,

bank portfolio and real$ in intermediates to long end. Heavy Eurodollar option

volume, early put buys target year end hikes to be priced into curve. Meanwhile,

short end Eurodollar futures well bid as 3M LIBOR rose scant +0.0003 to 2.3595%

(+0.0064 last wk). Large upside call buys early second half +140k EDM 82calls,

cab, +25k TYM 125.5 calls, cab-7. 

- Late ylds: 2Y 2.470%, 3Y 2.630%, 5Y 2.816%, 7Y 2.931%, 10Y 2.970%, 30Y 3.140%