Fri's stronger than exp Oct NFP........>

US TSY FLOWS: Fri's stronger than exp Oct NFP (+128k vs. +85k est) saw rates gap

lower followed by decent two-way positioning from fast$ and prop accts in

intermediates. Midmorning bounce reversed on weaker than expected manufacturing

PMI (48.3 vs. 49.0 exp). Post-data perspective: Tsy futures only unwound half

Thursday's strong rally that was driven by US/China long-term trade deal doubts

and weakest PMI in near 4 years.

- Fed speakers out of blackout, Dallas Fed Pres Kaplan said current mon/pol

"basically appropriate" and "strongly advocates remaining patient". Lead

quarterly Eurodollar futures traded off on decent volume, Dec rate cut chances

back to the mid-teens.

- Decent but not heavy volume trade, rather disappointing for a NFP miss. 3M10Y

curve lead steepening to near 7 month highs ahead NY Fed bill buy operation:

purchases $7.501B in 30 minute op. Long end buying late with modest short

duration unwinds in 30s.

- The 2-Yr yield is up 4bps at 1.564%, 5-Yr is up 3.8bps at 1.5572%, 10-Yr is up

3.9bps at 1.7295%, and 30-Yr is up 3.3bps at 2.2125%.