US Treasuries are trading...........>

US TSYS SUMMARY: US Treasuries are trading modestly higher with the yield curve

flattening, taking cue from bid in UK Gilts and to a lesser extend German Bunds

as well. US 10-yr yield is 2.2bp lower at 2.524% with 2s/30s 1.7bp flatter at

83bps.

- UST 10-yr future held relatively steady during Asian session despite the

Dollar seeing some limited buying, and then squeezed higher as Europe looked to

open in positive territory on steady German final HICP and German political

uncertainty,

- Move higher in UST though really got going when UK opened as Gilt market had

the chance to react to BoE Tenreyro comments which reinforced the central bank

was in no hurry to raise rates.

- Soft UK core CPI then supported another bid in USTs. US breakevens are sharply

tighter with 30-yr 2.6bp lower, while swap spreads are mixed

- There has been some decent swap flow go though this morning with receiving in

the belly of a 8Y-9Y-10Y fly and paying in the belly of a 3Y-4Y-5Y fly.