After opening higher -- Tsys just......>

US TSY FLOWS: After opening higher -- Tsys just off late session lows by the

bell on moderate volumes (TYZ>1.2M) as rates receded on hopes over Brexit draft

(markets may see as soon as Wednesday). Total +10k FVZ Block buying lows added

impetus to bounce. Nice round trip in 3M10Y yld curve -- back to last Fri's 5+

month highs.

- Rounding out the developing "risk-on" tone, equities gained as latest earning

season gets underway, gold weaker (-12.15 in late trade).

- Little data to trade off of (US REDBOOK: OCT STORE SALES -0.2%), rate support

quickly evaporated on midmorning Brexit draft headlines. Despite weakness in

rates, many took with grain of salt -- expecting a rebound on denial of draft

deal talk. Rates did draw some short covering from program and fast$ accts as

senior EU official called chatter "spin" and "way to premature". Time will tell.

- Modest deal-tied hedging in short end, aforementioned +10k FVZ block buys

- The 2-Yr yield is up 3.1bps at 1.6221%, 5-Yr is up 4.1bps at 1.5954%, 10-Yr is

up 3.7bps at 1.7657%, and 30-Yr is up 3.6bps at 2.2305%.