Tsys trading moderately lower.......>

US TSYS SUMMARY: Tsys trading moderately lower into the bell, in the bottom half

of the range, strong volume (TYZ 1.72M). Curve steepening continued today as

2s10s steepened by 1.8bps to over 27 while 5s30s jumped 2.0bps to over 27, both

approaching their 50 day moving averages. Light data today as US Housing Starts

come in much stronger than expected (1282k vs 1238 expected) and Building

Permits come in much weaker than expected (1229k vs 1320k expected). Looking

ahead to FOMC, Sept is priced for a hike while Dec continues to move closer to a

hike. With a Sep hike all but certain, CME group has a 83.2% chance of a Dec

hike to bring the rate to 2.25%-2.50%. MNI's Pinch Model has a 90.2% chance of a

Dec hike given a Sep hike.

-US$ lower DXY -.105, 94.535 (94.320L/94.727H), $/Eur slightly slightly higher

+0.0007 at 1.1667, $/Yen lower -.10 112.26, (112.16L/112.36H); equities higher

(emini +1.25, 2913.00 vs. 2918.75H); Gold up (XAU +5.40, 1203.78); West Texas

crude higher (WTI +1.31, 71.16).

-Tsy cash/ylds: 2Y 99-21 (2.803%), 5Y 99-1.25(2.958%), 10Y 98-08 (3.079%), 30Y

95-18 (3.232%).