US Treasuries have slipped lower....>

US TSYS SUMMARY: US Treasuries have slipped lower Tuesday with yield curve

marginally steeper as the long-end underperforms the short end, however, prices

are well off worst levels, taking cue from recovery in Gilts and Bunds. US 10-yr

yield is 1.3bp higher at 2.8731% having traded in a 2.853% to 2.884% range.

5s/30s yield spread is 1.1bp steeper

- US Tsys traded slightly heavy but in a tight range during Asian session,

falling back towards session lows following a less dovish RBA statement.

- Tsys dropped quickly on cross over to London trade, weighed by return to

risk-on sentiment as markets faded fears of a large Italian budget deficit and

stocks looked to edge higher.

- Sentiment reversed shortly after Gilt market opened though and Tsys recovered

around half of their losses, underpinned by news that DB could fall out of the

Euro Stoxx 50 index and weaker than expected UK construction PMI.

- Red, Green and Blue Eurodollar futures are 1.5 to 2 ticks lower, whites mixed.

- US construction and ISM mfg are the main data highlights today before

attention turns to factory/durable goods orders & labor report later in the week