Tsys ylds recede after gaining last....>

US TSY FLOWS: Tsys ylds recede after gaining last couple sessions (10YY 2.569%),

futures near highs by the bell, drifted in

narrow range for much of second half, yld curves mostly steeper. Volume trade

improved compared to week opener (TYM appr 875k vs. 530k) but still rather

muted. Yld curves mostly steeper.

- Equities surged (SPX 23 points (0.79%) at 2936.5); USD index firmer (DXY

+.322, 97.608); West Texas holding gains (66.29H).

- Short end remains well supported as rate cut probability slowly gains momentum

for later in year. Light but improved incoming supply generating some hedging,

ongoing heavy upside Eurodollar call spd buying. $40B 2Y note auction

(9128286P0), awarded a 2.355% rate (2.261% on $40B Mar auction) hair under

2.357% WI.

- On tap for Wednesday: MBA Mortgage Applications for April; crude oil stocks

ex. SPR w/w. US TSY $20B 2Y FRN and $41B 5Y note auctions. The 2-Yr yield is

down 2.5bps at 2.3618%, 5-Yr is down 2.7bps at 2.3593%, 10-Yr is down 2bps at

2.5686%, and 30-Yr is down 1bps at 2.9824%.