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Generally quiet start to the week,.....>

US TSY FLOWS
US TSY FLOWS: Generally quiet start to the week, Tsy futures Mostly bid by the
close but well off early highs, choppy second half trade tended toward selling
into bid on light volume (TYH<960k late). Second half focus on opposing USMCA
headlines, that a deal was near, denied by WH officials but talked up again by
Pres Trump a few minutes later. Mkts getting used to uncertainty showed little
react.
- Heavy Tsy option flow, outright OTM call buying, Jan/Feb rolling across the
curve. Two-way positioning ahead Wed's final FOMC rate annc for 2019.
- Swap spds running mostly wider by the bell, spd curve steeper all session vs.
flatter Tsy yld curves. Mild flow included receivers in 2s, light two-way in
intermediates, deal-tied selling in the mix.
- 3Y Note auction: Right on the screws, US Tsy $38B 3Y Note auction (912828YW4)
awarded 1.632% (1.630% previous) vs. 1.632% WI, bid/cover 2.56 vs. 2.60
previous.
- The 2-Yr yield is up 0.6bps at 1.6211%, 5-Yr is up 0bps at 1.6627%, 10-Yr is
down 0.9bps at 1.8277%, and 30-Yr is down 1.4bps at 2.2638%.

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