Stronger than exp. headline official........>

US TSYS: Stronger than exp. headline official Chinese PMI data (released over

the weekend) set the tone for the session, with bonds trading heavy from the

off, even with several source reports out of Beijing pointing to the need for

tariff rollbacks in the Sino-U.S. trade war. Elsewhere, Axios noted that the

deal was now "stalled because of Hong Kong legislation" & that time is needed

"to allow Xi's domestic politics to calm." The "Phase One" deal with China would

probably happen "year-end at the earliest," Trump is expected to hold off on his

planned Dec tariffs to keep the deal alive. Two other sources close to the China

talks said several substantive obstacles remain." T-Notes -0-09+ at 129-02, just

off lows. The cash curve is running steeper on the day; yields +1.4-3.9bp across

the curve. Flow wise, the highlight was a 10.0K 1x2 USF0 160.00/161.500 call

spread block, which was seemingly lifted.

- Eurodollars sit +0.25 to -4.0 ticks thru the reds, strip sits steeper.

- The m'fing ISM & final Markit equivalent headline Monday's docket. Elsewhere,

participants will be on the lookout for a potential announcement re: the U.S.

retaliation (if any) to the French digital tax.