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Risk on sentiment saw treasuries end...>

US TSY/RECAP
US TSY/RECAP: Risk on sentiment saw treasuries end lower on Monday with US
stocks still firm and tighter Portuguese sovereign debt spreads. Tsys saw mixed
flows and reversals of some pre-weekend safe-haven bid flow. Traders say volume
was half normal.
- Tsys were hurt by weaker German Bunds, FX-tied selling. Fast$ 2way flows,
real$ better buyers, macro funds were quiet (awaiting FOMC Wed.) Rate-lock
hedging vs high-grade corporate bonds; issuance sped up before Wed FOMC and
Thurs/Fri Jewish religious Rosh Hoshanah holidays. Jitters on Wed FOMC Fed
balance sheet reduction news, potential Dec rate hike views. 
- US TSY FUTURES: Block buy 10:30am ET of 8,500 FVZ 5Y futures at 117-31, buy
through 117-305 offer at time. German Bunds hurt by 12,276 RXZ7 block trade, in
UK afternoon. 
- US rate hike % remained at/near 0% for next 2 FOMC meetings but because of
strong short end sales (new lead quarterly Dec'17 Eurodollar futures), low delta
put buys rose, support implied and curve bear steepens. 
- T-Notes open Asia up 1 tick at 126-03+, 10-Year yield last at 2.229%.

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