T-Notes continue to operate at/around.......>

US TSYS: T-Notes continue to operate at/around best levels at writing (shy of

Friday's late session highs), with the early weakness, stemming from the

optimistic rhetoric from U.S. President Trump & Chinese counterpart Xi noted

over the weekend re: trade, fading. Worth highlighting that proof is likely to

be in the pudding, with markets waiting for the end deal, tired of the rhetoric

that they have become used to.

- Slow grinding bid likely helped by soft Chinese manufacturing PMI data, which

moved into contractionary territory for the first time since July 2016.

- Cash markets are closed until the London open, with week set to be broken up

by the New year holidays. Focus on NFP's Friday and the ongoing gov't shutdown.

Republican Sen. Lindsey Graham stated that Trump is "open to a compromise with

Democrats that includes $5bn for border security "in areas that make sense" in

exchange for legislative changes DACA & TPS" as reported by CNN.

- Little in the way of Eurodollar volume, with the whites and reds trading

unchanged to 1.5 ticks lower.

- T-Notes last 121.22+, U.S. 10-Year cash Tsy yields closed at 2.718%.