Research Treasury Bond Market

TSYS: Treasuries are largely higher and flatter in London trade Weds, although off the session best levels seen earlier in the day. Prices were largely flat in early Asian trade, before rallying as the dollar scored gains across the board. The longer-end of the curve led the way higher, with hot money buying of 10s and 30s. The front of the curve lagged, despite talk of an Asian central bank buyer of 3-yr paper. UST prices hit their best levels in early London trade as peripheral spreads ballooned wider, but drifted on profit-taking as Spain, Italy et al rallied from the worst levels. Profit-taking saw longer-end off their best levels, although still higher across the board. The yield on the benchmark 2Y was last at 0.275%, with the 5Y at 0.73%, the 10Y at 1.76% and the Bond at 2.905%. The curve is trading flatter, with both 2/10s and 2/30s tightening 1 bps to +148 bps and +263 bps respectively. Cross-border trade saw the benchmark 10-yr US/German spread trading at +31 bps.

U.S. Treasuries were firmly supported in Asia on Wednesday, with 10-year yields stuck near a seven-month low as investors look for a safe haven on worries Greece may be inching closer to an eventual exit from the euro zone.

TSYS: Treasuries have extended their rally ahead of the European open, rallying on safe haven buying as the dollar finds a bid against all the major currencies. Traders note fast money buying of 10's and 30's with regional central banks buying 3s. The yield on the 3Y was last at 0.375% and the 10Y at 1.765%. The Bond was trading at 2.91%.