US Tsys are trading steady to.......>

US TSYS SUMMARY: US Tsys are trading steady to lower ahead of NY open with the

belly of the yield curve underperforming the wings as risk-on sentiment

continues in wake of possible new Italian government.

- 2-yr Tsy yield is 1.2bp higher at 2.423%, 5-yr +2.2bp at 2.703%, while 10s is

+1.45bp at 2.8695% and 30-yr +0.2bp at 3.029%.

- Bullard speaking as a guest speaker at an MNI Roundtable Dinner in Tokyo says

the Fed is ahead of the curve as it has raised rates and reduced balance sheet

before inflation hit targets. Says he is worried Fed will move to far on rate

policy and is looking at the spread between 1-yr and 10-yr US Tsys and is

concerned about it inverting. Spread is currently at 65.9bps.

- Tsy note future dipped to session low of 119-30 shortly after European open

following decent screen selling (10k from 120-00 to 119-31+), but has since

recovered slightly to 120-01+

- Eurodollar strip has been under pressure since Asian session with curve

steepening as green/blue contracts fall 4-4.5 ticks, compared to 0.75-3 tick

fall in whites. Swap spreads are ~0.5bp wider while breakevens little changed.