US treasuries have bounced off......>

US TSYS SUMMARY: US treasuries have bounced off European session lows but remain

on the back foot, weighed by further risk-on sentiment flows. 10-yr note yield

is 1.1bp higher at 2.8377% compared to intraday high of 2.8451%.

- It was a relatively sedate US Tsys Asian session with the latest round of

Chinese GDP data holding no surprises, with the T-notes operating in a 3+ tick

range. The curve has traded in mixed fashion with 2-Year yields easing a little,

while yields from 5-Years out have edged higher, allowing the curve to reverse

some of the flattening that was evident on Monday.

- The latest round of TIC flow data (for Feb) showed that China boosted its

holdings of Tsys by the largest amount in 6 months, while Japanese investors

shed their Tsy holdings, perhaps in front of the end of the FY and as USD

hedging costs moved higher.

- At start of European trade Tsys slipped lower taking cue from selling in UK

Gilts in positioning ahead of key UK jobs data, but then pared losses as both

Gilts and Bunds bounced off lows on weaker than expected UK avg weekly earnings.

- 2-yr part of the curve is relatively steady while rest are circa 1bp higher.