Space turns bid shortly after the re-open...>

US TSYS: Space turns bid shortly after the re-open as the U.S. Senate passes

legislation re: an annual review for Hong Kong's special trading status, based

on autonomy from Beijing, in light of the recent protests in the city. T-Notes

last +0-05 at 129-19. This will not please Beijing, but doesn't come as a

surprise. Trump's silence on the matter is noted. Trade war angst, driven by

commentary from the Global Times & its now famed Editor in Chief, as well as

threats from Trump ("If we don't make a deal with China, I'll just raise the

tariffs even higher") provided support for the space on Tuesday, with the curve

bull flattening as a result. Elsewhere a BBG sources piece noted that, "the

near-deal between the U.S. and China that fell apart six months ago is now being

used as the benchmark to decide how much tariffs should be rolled back in the

initial phase of a broader trade." The story pointed to scepticism from both

sides re: a phase two agreement covering "structural reform," & some differences

over the degree of tariff rollbacks that are warranted under a phase 1 deal.

- Fed's Williams added nothing of note to the MonPol debate.

- Wednesday will see the release of the minutes from the latest FOMC decision.