US Tsy futures are trading just off daily...>

US TSYS: US Tsy futures are trading just off daily highs across the board with

the 10-year at 118-09 as it attempts to break out of its downtrend from the

mid-August highs. 

- Bond and equity correlations have risen sharply as lower US equity futures

have supported prices. 

- The 10-year yield has managed to rise off its lows at 3.1536% but would need

to rise back above 3.2% to return the focus higher.

- The curve has remained unchanged from the US close at 32.36bps following

yesterday's drop. The underperformance in the 30-year continues with the 10s-30s

trading near multi-month highs at 18.35bps.

- Real 10-year yields have dropped back below 1.0%, extending yesterday's losses

and looking very attractive from a relative value perspective.