Rates continued to grind lower into....>

US TSY/RECAP: Rates continued to grind lower into the close on Friday, with

T-Notes going out near worst levels, as the curve unwound its early flattening.

- Intermediates took the brunt of the pressure on the back of the strong U.S.

labour market report.

- Better selling returned after two-way in mid-morning U.S. trade, prop &

fast-money a/c's were selling 5s, with bank and real-money a/c's selling further

out in the curve

- Heavy options volume was observed, Tsy option a/c's sold >12K Dec 10-Year

117/117.25/117.5 put strips.

- Trump remained upbeat re: U.S.-China trade talks after the BBG reports

pointing to him asking his cabinet to draft a potential deal, although his

advisor Kudlow played down the report, stressing there had been "no massive

movement to deal with China."

- Attention turns to this week's Mid-term elections Tuesday, followed by the

FOMC MonPol decision.

- T-Notes last 118.02, U.S. 10-Year cash Tsy yields closed Friday at 3.212%.