10-yr US Tsy yield is on the cusp...>

US TSYS SUMMARY: 10-yr US Tsy yield is on the cusp of breaking above the 3.00%

physiological level having extended losses in Asia and at start of European

session. US 10-yr yield last 2.8bp higher at 2.9882% vs high of 2.9957%.

- Positive US-China trade rhetoric over the weekend & suggestions that North

Korea is willing to cease its nuclear development programme helped Tsys move

lower, although US President Trump sound relatively cautious on the scope of

developments made re: North Korea in a tweet from the weekend.

- In terms of flow, sources noted "better interest to buy cash, primarily in the

10-30 Year sector but swap flow has mostly been the other way. Volumes have not

been particularly impressive for a day where we'd expect perhaps a little more

reaction to the Friday move.

- Sources also noted decent buying in intermediaries once London markets opened

despite the weakness in Bunds

- The Eurodollar strip is softer in the main; EDM8 is 0.5 tick higher, however

the rest are 1 to 4.5 ticks lower with curve steepening. While option flow has

been steady with mainly buying of downside protection.