Early, tentative risk-on trade gave....>

US TSY/RECAP: Early, tentative risk-on trade gave way to risk-parity like

support for equities as well as Tsys, with T-Notes finishing in the middle of a

tight range on Tues, operating on modest volume ahead of the Sep FOMC meeting

mins, due Weds. Curves extended flattening as FI implied vol ground lower. 

- JOLTS data was strong, which applied some modest pressure to the space.

- Speaking at a FSOC event, Fed Chair Powell said he is worried about the

"spill-over" effect on the U.S. economy in the event of a hard Brexit.

- Late in U.S. hours the new San Francisco Fed President ('18 voter) Mary Daly

made her 1st major public address since assuming the role. BBG covered the

speech, with Daly noting that "inflation is effectively at the Fed's 2% target,"

while she believes that the "labour market is beyond a state of full

employment," describing econ growth as "robust". Daly noted that tailwinds for

the econ include fiscal stimulus & financial conditions. Finally, Daly suggested

that the recent move in the stock market wasn't "worrisome," in her view.

- Sep FOMC mins headline Weds, with housing starts & building permits also due.

- T-Notes last 118.04+, U.S. 10-Year cash Tsy yields closed at 3.163%.