A muted re-open for the space. Headlines....>

US TSYS: A muted re-open for the space. Headlines in Wednesday's London morning

detailing China's reneging of previous agreements re: trade matters leant

support to fixed income, though the bid faded in NY hours, with T-Notes going

out near worst levels as the curve steepened modestly.

- Sell off accelerated after White Press Sec Sanders noted that the U.S. has

received an indication that China wants to come to a trade deal. China's MOFCOM

pushed headlines out not long after, noting that it will retaliate to the

planned U.S. tariffs. The move lower gained further traction on the back of a

soft 10-Year auction, which saw a 1.4bp tail, with the cover ratio easing to the

lowest levels seen since 2009, as dealer participation surged.

- The announcement of 8-tranche corporate supply from IBM, totalling $20bn, also

provided weight.

- In terms of Fedspeak, Brainard indicated that she wants to "hear more" on

yield level targeting. While Barkin suggested that it is hard to have a

recession with unemployment and rates as low as they are.

- T-Notes last 123.25, U.S. 10-Year cash Tsy yields closed at 2.484%.