Risk-off tone tied to US/China trade...>

US TSY FLOWS: Risk-off tone tied to US/China trade angst underpinned rates

through the NY session, yld curves flatter w/short end underperforming. Brief

risk-off unwind/knee-jerk reaction to late morning US/China trade/tariff relief

headline. Fast retrace: Tsys bouncing while equities are pared back gap move,

S&Ps near steady in late trade. Bbg posited US/China tying tariff relief to the

failed deal from May -- being used as a benchmark to decide how much tariffs

"should be rolled back in the initial phase". Risk-off resumed as US Pres Trump

said US would just raise tariffs "even higher" if China "doesn't make a deal".

- Reality check: despite the underlying risk, session was rather subdued

w/overall volumes inflated due to spike in Dec/Mar Tsy futures rolling ahead

next wks first notice on Fri's shortened post holiday session.

- Session flow included two-way swap flow in 2s-10s that tended toward better

receiving, sporadic payers faded move as 2Y spd re-inverted, large 2s10s

flattener Block, light deal-tied hedging.

- The 2-Yr yield is down 0.2bps at 1.5961%, 5-Yr is down 1.5bps at 1.6204%,

10-Yr is down 3.1bps at 1.7843%, and 30-Yr is down 4.5bps at 2.2541%.