Stomach churning ride continues --.....>

US TSY FLOWS: Stomach churning ride continues -- Tsys trading weaker/lower half

overnight range, apparently following Bund lead amid decent volume (TYZ>500k),

yld curves mostly/mildly steeper. Note, however, sovereign peripherals are wider

(BTP/Bund scaling back from Mon's narrowing, 5Y currently +8.8).

- Tsys had pared losses/traded higher late Mon as equities erased gains/gapped

lower on back of US Trump/China Xi headlines, speculation over increased tariffs

if talks fail; Trump foresees "great deal" later. 

- Vol index currently mildly lower (VIX -.37, 24.33) after gapping to 27.86 late

Mon; US$ index firm (DXY +.332, 96.911.

- Early two-way flow gave way to better selling long end by real$, Tsys holding

range into London crossover. London flow included two-way in 5s, real$ +10s,

swap-tied selling 10s.

- Eurodollar futures weaker at moment, still waiting for LIBOR sets; 3M FRA/OIS

currently +.65 at 35.10

- Tsy cash/ylds: 2Y 100-02 (2.839%), 5Y 99-21.25 (2.946%), 10Y 98-00 (3.111%),

30Y 93-10.5 (3.355%).