Risk-off flows were triggered in early......>

US TSYS: Risk-off flows were triggered in early Asia hours as e-mini S&P 500

futures broke < 2,800, with little in the way of headline catalysts noted. There

was a commentary piece in China's People's Daily noting that the U.S. shouldn't

underestimate China's ability to fight in the trade war & signalled that the

country may use rare earth exports as a weapon, but this really wasn't new, and

there was an hour or so between that headline & the move, suggesting that the

break in S&P futures was the driver. The belly of the curve has outperformed.

The recent theme of downside interest in FVN9 options during Asia-Pac hours

persisted, even with Tsys bid. This time there was a 10.0K buyer in the FVN9

116.25/115.75 put spread.

- Eurodollar futures trade 0.75-4.0 ticks higher thru the reds. 4.0K of the EDH0

98.00 calls were lifted, while 4.3K of the EDH1U1 spread were lifted.

- 7-Year supply provides the highlight of today's local docket. The 2- & 5-Year

auctions went well Tuesday, despite the truncated supply schedule & even with

yields at recent lows.

- T-Notes last 125-19, just off highs, U.S. 10-Year cash Tsy yield at 2.241%.