T-Note futures threatening a clean break....>

US TSYS: T-Note futures threatening a clean break above yesterday's highs in

early Asia trade +0-03 at 130-13, after going out virtually at best levels on

Monday with yields closing marginally lower across the curve.

- A softer than expected MNI Chicago PMI print was the catalyst behind a sharp

bid in the NY morning, with familiar risks bubbling in the background, keeping

traders cautious.

- A late block buyer of WNZ9 also helped to keep the space bid into the close.

- It must be said that futures volume was low on the final day of September &

Q3, with an uptick in stocks perhaps limiting the space's gains on the day.

- We also heard from Fed's Evans in early London hours. To paraphrase, Evans

told CNBC: "open minded re: doing more on rate cuts. Own expectation is that we

should overshoot on inflation."

- Focus Tues moves to m'fing ISM & speeches from Fed's Evans, Clarida & Bowman.

- Also worth flagging that the NY Fed has reduced the size of tomorrow's

overnight repo operations to $75bn (back from the $100bn they were upsized to

last week) after undersubscription became evident in the last couple of ops.