- US TSYs lack direction this..........>

BOND SUMMARY: - US TSYs lack direction this morning and are trading in a

relatively tight range. Current yield levels: 2-year 2.547%, 10-year 2.6995%,

30-year 2.992%.

- The shorter-end of the Bund curve sold off from the open, but lost momentum

just after 0730GMT and have since been trading sideways. The longer-end has

pared some of the earlier losses, allowing the curve to flatten. The 2s30s

spread has narrowed to 144.5bps from a high of 145.7bps.

- The French OAT curve has similarly flattened with 2s10s trading down to

115.9bps from 117.1bps.

- Italian BTPs lack direction and are trading in a relatively tight range. The

very long-end has underperformed slightly on the day with the 30-year yield up

1.6bps from yesterday.

- It has been a quiet session for gilts so far with limited movement in the

curve. 

- Euro$ futures have traded lower with reds down 3.0-4.5 ticks and

underperforming the strip. Euribor futures are broadly 0.5-2.0 ticks lower.