J.P Morgan on YIELDS: In yesterday's........>

US TSYS: J.P Morgan on YIELDS: In yesterday's Asia-Pac session yields rose

3-4bp, only to retrace through the morning in NY and close just 1bp higher

across the curve, remaining neutral on duration and holding 3s/5s steepeners.

'Treasury yields continued higher despite a rally in core European government

bonds and a widening in peripheral spreads following yesterday's Catalan

referendum.' The 3-Year note backup stalled after whipsawing support at

1.62-1.645% intraday. Short-term momentum divergences suggested the sharp Sep

selloff may have been mature and the market could see yields stabilise near

current levels before bullishly reversing. Tactically, closes richer than 1.54%

would derail bearish trend momentum.

- 'Domestically, we expect the focus to remain on Congressional votes on the

FY18 budget resolution this week as well as the debate over who will be the next

Fed chair. Though both developments may keep yields elevated, intermediate

Treasuries appear modestly cheap to fair value, and we think front-end markets

are appropriately pricing near-term Fed tightening'

- Todays Asia-Pac U.S Tsy yields opened flat, now down 0.2bp.