US Tsys at session highs............>

US TSYS SUMMARY: US Tsys at session highs following a US session pretty much

influenced by shifts in US stocks, rallying on any move lower but holding firm

on any recovery. While $35bln 5-yr tap auction went by without a hitch.

- Just before close 10-yr note yield broke significantly below 1.80% level and

is currently seen at 2.7807%. While curve is sharply flatter as 2s lag

- There was little US data today but what there was came in on the soft side

with Richmond Fed manufacturing index dropping more than expected to 15 from 28,

while conference board consumer confidence slipped to 127.7 from a downwardly

revised 130.0

- Tsys were little fazed with the small tail at the 5-yr auction with markets

more concerned about moves in US equities, with tech stocks (Facebook, Twitter)

hit hard once again.

- There has been some buying in 5-yr and 10-yr Tsy call options  while there has

been some selling of put Eurodollar options.

- Swap spreads are tighter with 2-yr the a blow out 5.5bp tighter with receiving

in the belly seen on 2Y-10Y-30Y fly