Plenty of questions regarding the Govie.......>

BONDS: Plenty of questions regarding the Govie sell off, which was Gilt led in

the London morning session, but have since been led by Treasuries, surprisingly

post a lower CPI + risk of no news on the trade war front. Equities have done

nothing, with USD better bid on higher yields and lower Gold.*Worth noting that

Tonight sees a US 30 yr auctions at some of the lowest yields on records, and

long end hedging could be contributing to the price action.

-AUCTION PREVIEW: From BMO Today will be the lowest yielding 30-yr auction on

record even though long-end rates have backed up somewhat from their bullish

extremes. On an outright basis that is not a reason to anticipate an aggressive

bid today and is likely some of the reason we have seen the last three auctions

average a 1.8 bp tail. Primary dealer positions are holding near record net

longs, and large long-duration positions on dealer balance sheets is not a good

market appetite indicator. SOMA is not buying anything via add on today, but

bonds are not showing any signs of specialness in repo, so this should not drive

an incremental bid.