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To: Lucretius who wrote (52865)	7/23/1999 11:24:00 AM
From: John Pitera	Read Replies (1) of 86076

Luc, the 10 yr is holding at it's 50 dma, while the TBond is below it's 50 dma today. the 10/30 is flattening -ng- From Today's Briefing.com The 10/30 spread continues to deteriorate, having flattened to 17.7 bp earlier in the session from 19.3 bp in late afternoon trading yesterday. While we did not expect such hawkish comments from Chairman Greenspan yesterday, we did note that over the last 10 Humphrey-Hawkins testimonies, there was a noticeable tendency for the spread to flatten, which bode well for our call earlier this week to unwind 10/30 steepeners at a pickup of roughly 23-24 bp. While sources we spoke with suggested that we may have seen all of the benefits from such a recommendation, given that the August refunding includes the bond, we would stick with this trade for a little longer. As we have already noted, a modest seasonal flattening trend soon comes into effect, while the market is starting to come to terms with the possibility of a more pronounced tightening environment. A move back to the 16 bp level would represent a 68.1% retracement of the recent steepening trend that prevailed from late June to earlier this week.

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