Strong carry-over risk-off bid.........>

US TSY FLOWS: Strong carry-over risk-off bid US/China trade tension and

accusations of FX manipulation, renewed concerns over recession (3M10Y yld curve

flattened to new inverted low near -32.0 only 3 days at tapping +2.0), 10YY

falls to new low of 1.7413% last seen Nov 2016. Equities sharply lower/near lows

(ESU9 -42.25 at 2890.25); Gold +20.5 at 1461.1.

- Sep FOMC 25bp rate cut fully priced in while 50bp cut gains momentum (>16% on

CME model).

- Overnight flow included better buying across the curve, real$, fast$ bank and

insurance portfolio in intermediates to long end, two-way in 10s-30s since

London open, prop and fast$ selling short end, heavy option related hedge

volume, two-way curve flow flatteners/steepener unwinds in short end, mixed in

intermediates vs long end.

- The 2-Yr yield is down 8.4bps at 1.6274%, 5-Yr is down 7.5bps at 1.5831%,

10-Yr is down 6.3bps at 1.782%, and 30-Yr is down 5.8bps at 2.3244%.