T-Notes +0-01+ at 128-18+. Contract.........>

US TSYS: T-Notes +0-01+ at 128-18+. Contract unwound almost all losses into the

close on Monday, with month-/year-end flow, accentuated by touted pension fund

inflows, back at the fore after news flow/EGB-linked flow weighed earlier in the

day. Several sources pointed to broad real money demand across the curve on

Monday, with twist steepening the theme come the close. Cash Tsys will be closed

in Asia hours owing to a Japanese holiday. Trade war stories were back at the

fore. Firstly, SCMP sources noted that "Vice-Premier Liu He is set to lead a

delegation to Washington this Saturday, where he is expected to sign a phase one

deal that would significantly de-escalate the US-China trade war." Later in the

day Navarro confirmed that the signing should take place in the "next week or

so," and that the U.S. is awaiting the translation of the phase one deal.

Pending home sales, Dallas Fed m'fing & inventory data was weaker than exp.,

with the Chicago PMI topping estimates (remaining in contractionary territory)

and a narrower than expected advance goods trade deficit.

- Undescribed "turn" repo operations were also in vogue, again, with "turn"

fears alleviating in recent days/weeks.