Rates trading mostly higher by......>

US TSYS SUMMARY: Rates trading mostly higher by midday, long end outperforming,

near moderate session highs after a weaker open. Quiet start to wk, low volume

(TYM<650k at moment) with much of Asia out for holiday (China closed Mon, Tue

for Labor Day holiday, Japanese mkts closed Mon, Thu and Fri for public

holidays). Tsy 10Y yld -.013, 2.9438%.

- US$ index mildly higher (DXY +.212, 91.754; US$/Yen 109.18); equities

weaker/off early highs (emini -11.0, 2660.5); gold weaker (XAU -6.83, 1316.52);

West Texas crude stronger (WTI +0.41, 68.51), rebounding on increased geo-pol

tensions in mid-East as Israeli forces strike Syrian targets, to hold conf

tonight on Iran. 

- Geo-pol/mid-East tensions leant to risk-off bid in rates, cross-mkt support

from EGBs as Bunds rallied as well; month-end buying, two-way from fast$ in

short end, corp deal-tied hedging, rate receiving in 2s, 4s and 5s, curve

flatteners/steepener unwinds in 2s and 5s vs. 10s.

- Limited react to data on tap includes personal income (0.3%), US$ PCE (0.2%),

and Apr MNI Chicago PMI (57.6). FOMC policy annc on Wed, Apr NFP on Fri.