- US TSYs have rallied with the........>

BOND SUMMARY: - US TSYs have rallied with the 10-year benchmark yield down to

3.171% from a morning high of 3.190%.

- The Dec JGB futures trades at 150.24 from a low of 150.21.

- The German bund curve has flattened as a result of the longer end

outperforming with the 2s10s spread trading down to 102.7bps from 104.1bps.

- The early morning rally in short end OATs has reversed with yields now pushing

higher across the curve. The 2-year OAT trades at a yield of -0.428% from a low

of -0.444% while the 10-year is up to 0.813% from 0.793%.

- Italian BTPs have sold off sharply as the budget dispute continues to rumble

on. Yields at the shorter end are up 12bps on the day. 

- Gilts are relatively directionless, with the curve a touch flatter.

- Eurodollar futures are down 0.5 ticks while the Euribor futures strip is

steeper with whites down 0.5-1.0 ticks and greens/blues up 1.0-2.0 ticks.

- The data calendar is relatively light for the rest of the day with just Canada

CPI and retail sales, followed by US existing home sales.