US Treasuries are trading higher....>

US TSYS SUMMARY: US Treasuries are trading higher led by the belly of the yield

curve, supported by earlier flight-to-quality bid as the Turkish Lira spiked

lower and threats of economic war from Russia. Prices are off best levels though

as markets fade the earlier move. 10-yr Tsy yield is 2.5bp lower at 2.904% with

2s/10s 1.7bp flatter and 10s/30s 0.4bp steeper.

- It was a rather subdued Asian session before all of sudden sparked into life

as markets picked up on a FT article that suggested the ECB are concerned about

the exposure of some of the currency area's biggest lenders to Turkey.

- This led to large flight-to-quality bid in US Tsys as Lira sold off by around

70 big figures against the US Dollar. 

- Around the same time Russian PM Medvedev said that Moscow saw the new US

sanctions as economic war and that the country would respond economically,

politically or by other means if needed. Tsys faded from intra-day highs though,

taking cue from fall in UK gilts and as the Lira settled in higher range.

- Eurodollar futures are steady to 3.5 ticks higher in decent volume, strip

flatter as blue contracts outperform whites