Rates trade weaker, Tsys extending.....>

US TSY FLOWS: Rates trade weaker, Tsys extending past early London lows last

hour -- just as equities bounced off low end of range. Not a lot of conviction

on moves with volumes light (TYZ<275k), China still out on extended holiday.

- Limited data -- focus remains on headlines. Early overnight headline that

China looks to narrow scope of trade trade deal w/US as talks resume in DC this

week likely triggered gap sale in equities. That doesn't explain weaker Tsys,

however. 

- Tsy auctions resume, corporate issuance gradually picking up ($15B est/wk).

Sep FOMC minutes release Wednesday afternoon.

- Overnight flow did include swap-tied buying in wings, two-way positioning in

intermediates, light deal-tied sales picking up.

- The 2-Yr yield is up 0.8bps at 1.4115%, 5-Yr is up 0.2bps at 1.3486%, 10-Yr is

up 0.3bps at 1.5323%, and 30-Yr is up 1.6bps at 2.0314%.