US Tsys are edging higher ahead.....>

US TSYS SUMMARY: US Tsys are edging higher ahead of payrolls with the longer end

underperforming. 

- 2-yr Tsy yield is 1.2bp higher at 2.439%, 5-yr +2.5bp at 2.723%, while 10s is

+3.1bp at 2.8695% and 30-yr +0.2bp at 3.051%.

- There is a very slight tendency for consensus to overestimate NFP, although

historically in May there is no bias in either direction. The consensus range

for May is 150-250k. Although the market would react to an NFP print close to

these limits, we would only expect a number closer to 300k or towards 100k as

having lasting traction. 

- While NFP remains one of the most important data points, the Federal Reserve's

current willingness to normalise monetary policy in the face of less than

favourable economic developments suggests that a scenario in which NFP is weak

but wages strong would be net hawkish for monetary policy.

- The eurodollar curve continues to steepen with green/blue contracts down 5-7

ticks compared to 1-4 ticks in the whites.