Italy back in the spotlight after......>

US TSY FLOWS: Italy back in the spotlight after Thu's budget meet 2.4% deficit

higher than exp), BTPs wider vs. Bunds (5Y appr 45.0), peripherals wider in

general (Greece +18.0 vs. Bunds at moment). US$ strong, DXY +.425, 95.319 vs.

95.366H while Euro slips below 1.160 to 1.1583.

- Month/Qrtr end adding to moderate risk-off bid in Tsys, equities under

pressure. Data on tap includes MNI Chicago PMI (62.0 est vs. 63.6 prior).

- Short end rates remain well bid, Eurodollar futures lead quarterly EDZ8 +0.020

at 97.345H as 3M LIBOR climb moderates (+0.0023 to 2.3983%, +0.0257/wk).

- Flow includes prop and fast$ buying short end, foreign real$ buying 5s, bank

and real$ +10s vs. prop sales, better buying in long end seeing some selling

last half hour.

- Ongoing political headline distractions from Washington: SCOTUS Kavanaugh vote

at 0930ET. Note, China out next week for National Day holidays will dampen

volume a little.