BMO's Ian Lyngen and Aaron Kohli...>

US TSYS/RESEARCH: BMO's Ian Lyngen and Aaron Kohli said Tsys "fundamental

landscape certainly has changed since the beginning of the year, and between the

Fed's insistence on tightening into benign core-inflation data and the absence

of any positive momentum from Washington, a lower rate environment can find

plenty of justification. We'll layer in the removal of bearish EGBs as an

important global rate influence as well, which speaks to the potential for a

retest of 2.103% 10-year Treasury yields as much as anything else. After

crossing back into positive territory in October, 10-year Bund yields have spent

the intervening period with an average of 32 bp, peaking at 60.3 bp in mid-July.

- They add "this week's move brings German yields back below 38 bp, pricing out

much of the positive European economic sentiment that was evident earlier in the

summer. We remain somewhat surprised at how quickly the optimism associated with

Macron's victory over Le Pen has faded, but will conceded that with unpopular

budget cuts and facing deep union opposition his 37% approval rating (down from

59% in June) probably isn't helping the outlook - but we digress."