Tsys trading mildly higher, upper....>

US TSY FUTURES: Tsys trading mildly higher, upper half of range, moderate

futures volume (TYM>370k), 10YY just below 3.0% to 2.994% (-.0318). Tsy support

as US$ scales back small portion recent gains, US$ index off (DXY -.051,

91.121), US$/Yen still over 109.0 at 109.146. Equities little firmer (emini

+6.5, 5651.0); gold mildly higher (XAU +1.87, 1324.99); West Texas crude firmer

(WTI +.46, 68.51).

- Asia, steady open/sideways trade for much of early Asia hours, mild selling

into London cross followed by concerted bid as US$ rolled off.

- London, aside from US$ correlation, Tsys gained w/EGBs, Gilts following dovish

Swedish Riksbank, waiting on ECB policy annc. Better buying in intermediates to

long end included prop and macro fund buying intermediates to long end, some

bank portfolio selling 10s.

- Swaps, spds running mildly tighter across the curve, bank receiving in 10s

earlier followed by receiver in 2s at 2.74118%, 2s3s and 3s5s steepeners.

- Eurodollar futures trading stronger, short end bid as 3M LIBOR set lower

(-0.0069 to 2.3587%, -0.0065/wk), EDM8 +0.030 to 97.635, over +50k at 97.63.