T-Notes a touch softer to start Asia-Pac....>

US TSYS: T-Notes a touch softer to start Asia-Pac trade, last -0-04 at 139-05+,

off the late NY highs. Belly of the curve outperformed in cash trade on Thurs,

as -ve rates fever gripped markets with some of the '21 Fed Funds contracts

trading > 100.00. TD Securities were quick to note that the space may be

experiencing "a repositioning or short squeeze" while UBS noted that "there are

4.7T reasons why negative rates are much more problematic in the US" as the MMF

industries "business model would come under severe strain if rates were

negative." UBS also suggested the move was likely dealer/fund stop out of

positions vs. bank portfolios. Potential triggers for the move include Fed's

Bostic pointing to the Fed using its full arsenal, while bond investor Gundlach

noted "these Trillions Treasury is borrowing is heavily in T-Bills. Chair Powell

has stated in plain English he is opposed to negative interest rates. Yet the

pressure to go negative on Fed Funds will build as short term borrowing explodes

and dominates. Please, no. Rates < 0 = Fatal." N.B. Fed's Barkin & Harker were

quick to play down -ve rates. Asia reaction to Thursday's moved eyed ahead of

Friday's NFP (which should be discounted by markets by now).