US Treasuries made a slow and.......>

US TSYS SUMMARY: US Treasuries made a slow and sure decline in the US afternoon

trading session but mostly marked time in the Asian session. 

- Fed Governor Quarles spoke in Asia but said little more insightful than the

economy is 'performing well'. There were no monpol comments.

- As European markets opened, equities began to fade and a bid appeared, first

for the Schatz as Spanish CPI disappointed and then the Bund as it broke through

technical levels. The TY future followed the European complex higher.

- The Bund-Treasury spread hit 232.5bp on the Bund rally this morning. This is

the widest spread since 1989. However, when accounting for the cross currency

basis swap, the pickup is a much narrower 17.7bp. With the Japanese FY end

approaching, there may be an acceleration of a switch to EGBs.

- There was a seller of at least 8k TYM8 at 0940BST, which had a material impact

upon price.

- Later on, Treasury sells $35bln 5Y notes and 4wk and 52wk bills. Economic data

includes consumer confidence and Richmond Fed mfg. Bostic talks at 1100EST