FTN Financials' Jim Vogel eyed..............>

US TSYS: FTN Financials' Jim Vogel eyed "surprising volume" in Tsys gains on

"weak auto trends." He said that "even though auto sales are well off the highs,

they rarely get this type of focus from Treasury market on first biz day of

month. Working assumption when autos slipped before, had been households would

spend on something else after stocking up on trucks in 2016."

- But he adds that with the Fed "still hawkish, traders on lookout for continued

weakness AND the possible interplay of tougher credit conditions and reduced

durable goods sales. That has not been a consideration for at least 3 years. Too

soon to conclude autos are a canary for Q3 weakness, but escalating UST

purchases with a mild flattening bent are something to watch to break the hold

the 2.30s had on 10s all thru last month."