US Tsys are trading close to........>

US TSYS SUMMARY: US Tsys are trading close to session lows, albeit in light

illiquid trade, taking cue from sell-off in German Bunds/Gilts. Curve is

slightly steeper as short-end remains anchored. US 10-yr Note yield is 1.64bp

higher at 2.986%.

- US T-note future actually edged higher during Asia, and a lack of news flow

allowed the ongoing trend of curve flattening to resume. However, Tsys sold off

at start of London trade weighed by comments from Fed Mester and some hawkish

leaning comments ECB Villeroy  

- Comments from Federal Reserve Bank of Cleveland President Loretta Mester in

Paris outlined policy framework debate. Said that it was "Too soon" to declare

victory on inflation though headline PCE inflation hit 2% in March and core PCE

inflation hit 1.9%. There was no change in her policy assessment that a gradual

path of tightening remains appropriate to balance risks on either side.

- Eurodollar strip is mixed with white contracts 0.25 to 1.5 ticks higher while

blue contracts are 1.5 to 2.0 ticks lower, volume light though.