*** Tsys trading weaker across......>

US TSYS SUMMARY: *** Tsys trading weaker across curve (5Y yld tapped 2.5543%;

10Y yld 2.7501%H), futures near recent overnight lows on heavy volume

(TYH>530k). Tsys mirror weaker EGBs as Spanish, French supply weighs. US$ index

off highs (DXY 89.026 vs. 89.328H), equities firmer (emini +2.0, 2827.75), gold

weaker (XAU -6.31, 1338.84), West Texas crude firmer (WTI +.44, 65.17).

- Asia, quickly pared an early bid, trading mildly lower range into London

crossover, fast$ sellers in intermediates, FX-tied selling as well as US$

rebounded vs. Yen (109.640 last)

- London, chopped lower, intermittent buying from fast$ in 5s, 10s real$ buying

intermediates, two-way from prop accts in long end.

- Swaps, spds running wider, spd curve flatter after steepening Wed w/long end

gapping wider on hopes of bank de-regulation making rounds again. Flow included

bank portfolio paying in 5s and receiving in intermediates, macros fund

receiving out the curve.

- Eurodollar futures, lower across the strip, at/near lows w/long end

underperforming, good volume Whites-Reds, 3M LIBOR +0.0092 to 1.7869%.