Optimistic rhetoric from U.S...........>

US TSY/RECAP: Optimistic rhetoric from U.S. President Trump & Chinese

counterpart Xi noted over the weekend re: trade, but proof is likely to be in

the pudding, with markets waiting for the end deal, tired of the rhetoric that

they have become used to. - T-Notes made fresh session highs late Friday,

finishing just shy of best levels as equity futures closed red across the board

(cash equities were marginally mixed). Rather light session volume, much of

which occurred during London and cross-over to NY hours.

- Decent option volume was noted, mostly buyers of low delta puts in near-end.

- Official China PMI readings may provide a catalyst in Asia-Pacific hours. With

Japanese markets closed cash Tsys will be closed until the London open, with

week set to be broken up by the New year holidays. Focus on NFP's Friday and the

ongoing gov't shutdown. Republican Sen. Lindsey Graham stated that Trump is

"open to a compromise with Democrats that includes $5bn for border security "in

areas that make sense" in exchange for legislative changes DACA & TPS" as

reported by CNN.

- T-Notes last 121.20, U.S. 10-Year cash Tsy yields closed at 2.718%.