T-Notes bid from the re-open +0-15 at.......>

US TSYS: T-Notes bid from the re-open +0-15 at 131-13+ (back from highs), owing

to the escalation in trade war matters & weekend rhetoric from Trump & Chinese

state media. The G7 summit saw Trump raise eyebrows as he suggested that he had

2nd thoughts about raising tariffs on Chinese goods. A subsequent White House

statement cleared the matter up; "President Trump responded in the affirmative -

because he regrets not raising the tariffs higher." The escalation in trade

matters far outweighed any of the rhetoric employed at Jackson Hole, with most

suggesting that Powell's address keeps further cuts well & truly on in play.

Subsequent comments from Vice-Chair Clarida via CNBC; "Obviously, the global

economy has worsened since our July meeting. The global economy is slowing and &

there's powerful disinflationary pressures." However, Clarida said the U.S.

economy is "in a good place," & doesn't see a heightened recession risk. Fed

hawk Mester followed, noting that she sees "big downside risk" from rising trade

uncertainty & will be watching how businesses and consumers react.

- Broader reaction to the trade war escalation will be the dominant theme in

Asia. Durable goods data highlights the local U.S. docket on Monday.