Tsys weaker across the board,.......>

US TSYS SUMMARY: Tsys weaker across the board, at/near session lows as stocks

and crude see strong post-Christmas rally. Tsy futures volume exceptionally

light<750k. Tsys briefly bounced off then session lows following second auction

tail of week ($41B 5Y note awarded 2.652% rate vs. 2.632% WI). Rates extended

sell-off as equities saw first real rally since late November.

- Equities firmer (SPX +84.0 at 2575.00) after opening appr -9.0. US$ index

ground higher (DXY +.489, 97.070), Gold reversed early gains (XAU -3.86,

1265.58), crude surged, making strong gains in second half (WTI +4.0, 46.53).

- For Thu: Conf Brd conf for Dec (134.6 est); Nov New Home Sales & Building Perm

Revs' canceled due to US Gov shutdown (see 0941ET Main Wire for details).

- Swap spd curve flatter by the bell/off midday levels w/long end paring move.

Moderate 2-way flow on the session includes decent scale receiver in 2s, appr

$750M from 2.7079-2.7050%, small paying in 3s at 2.6525%, receiver in 4s at

2.6475%, 2-way in 5s; two-way 2s3s5s fly, 3s5s10s payer fly and 3s4s7s receiver

fly. Tsy cash/ylds: 2Y 99-25 (2.615%), 5Y 101-02 (2.642%), 10Y 102-24.5

(2.801%), 30Y 106-07.5 (3.054%)