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

US TSYS SUMMARY: US Treasuries are trading slightly higher, having recovered

from overnight lows in last hour of Asian trade and then remained underpinned by

continued concerns in Italian Politics. US 10-yr Note yield is 0.7bp lower at

3.104%, while there is little change in the curve.

- The release of the incoming Italian populist coalition government's programme

at 0910BST sparked a risk-off move in EGBs and Treasuries followed suit. But

markets have since given up most of those gains as programme looked water-down

from draft versions

- In Asia, the US 10-year note future traded with a downside bias through much

of the overnight session with the 10-yr yield continuing its push higher

breaching important 3.12% level again to make new cyclical highs of 3.1261%,

triggering a renewed steepening of the curve (2s-10s).

- Eurodollars have edged higher but only by 0.5 to 1 tick, volume has been thin

though with little data seen during European session to direct markets.

- Looking ahead there is not too much US data to get excited about, however Fed

Mester, Kaplan and Brainard all speak today.