BMO's Ian Lyngen said "political...>

US TSYS/RESEARCH: BMO's Ian Lyngen said "political headlines will likely" be the

"driver of Treasury yields" this week "if for no other reason than the lack of

economic data - particularly early in the week. We're open to the risk that when

Yellen speaks tomorrow she further lays the groundwork for a December rate hike

in what could be her final tighten before leaving the Fed at the end of her

term. Chatter on Friday suggested that Warsh is now a serious contender for the

role of Fed chair - we have little insight on the prospects for his assent to

the helm of the FOMC, but will suggest that he would have an easier time during

the conformation process than controversial figures (Cohn for example)."

- He adds that "with better-than-even odds currently priced in for a December

rate-hike, we're impressed with how well the Treasury market trades overall -

particularly in the 10-year sector after yields peaked at 2.287%. At the risk of

overstating the point, we're increasingly constructive on the market as we watch

momentum reverse out of oversold conditions."