Tsys trading mildly weaker/off lows....>

US TSY FLOWS: Tsys trading mildly weaker/off lows after decent $27B 10Y auction

(9128285M8), trades through/awarded 3.209% rate (3.225% in October; 3.111% avg)

vs. 3.218% WI; 2.54 bid/cover (2.39 previous).

- Early Tsy support evaporated as equities opened bid, held gains into midday,

but support tenuous during Midterm elections. Reports of large equity sell

imbalances induced late chop as stocks pared gains, Tsys inched off lows, late

position squaring.

- Otherwise, early two-way flow turned better selling by prop, fast- and real$

in 5s-10s. Midterm election risk-event buoys implied vol in at-the-money 5- and

10Y options read higher on the day. Better put volume on net, calls more

two-way. 

- Tsy futures flattener Block: -11,398 FVZ 112-05 vs. +2,103 WNZ 148-19; Large

TYZ 117.5 put roll to TYF Block ahead quarterly expiry in couple weeks.

- Tsy cash/ylds: 2Y 99-28.75 (2.924%), 5Y 99-06.75 (3.045%), 10Y 97-06 (3.210%),

30Y 92-03 (3.425%).