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US Tsys are trading modestly........>

US TSYS SUMMARY
US TSYS SUMMARY: US Tsys are trading modestly lower and near bottom end of
overnight range, weighed by risk-on sentiment as risk of a German government
break-up falls and market positioning ahead of July 4 holiday. 10-yr yield is
0.7bp higher at 2.878% with yield curve slightly steeper as short-end remains
anchored.
- US Treasuries actually squeezed higher during Asian session supported by
risk-off flows as the yuan dropped and equities pulled back. Tsys pared gains
however as European session got underway, weighed by sharp fall in German Bunds
and UK gilts as Germany's Merkel and Seehofer agree on migration deal. 10-yr
Gilt re-opening auction and a buyer of US long bond (USU8) puts also seen
weighing.
- Eurodollar futures are 0.5 to 2 ticks lower, curve touch steeper as blue
contracts underperform, albeit in light volumes.
- Looking ahead there is US factory orders and final May durable goods data at
1000ET before early close at noon for July 4 holiday.

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