T-Notes edged towards Monday's late highs...>

US TSYS: T-Notes edged towards Monday's late highs at re-open, before tracing

lower, last -0-01+ at 132-19+ as the Asia-Pac region reacts to overnight

developments. Japan's inference after the long weekend may be key for price

action in the time zone. Ever spreading (in a literal & figurative manner)

coronavirus worry drove a bid for safe havens on Monday, as equity markets

cratered, with 30-Year yields registering fresh all-time lows and 10s coming

within ~5.0bp of their own all-time trough. Yields were 8.0-11.5bp richer come

the close, with the belly leading the way. Fedspeak from hawk Mester & dove

Kashkari noted no real sense of urgency to act. T-Note volumes were well above

the recent averages, although roll volume was noted.

- Upside protection added a further leg to the rally, with delta hedging

resulting.

- Sources reported fast-money a/c's selling short-end, while real-money was

reportedly buying 5s, 7s, 10s and 30s.

- Elsewhere, a desk note from Goldman did the rounds pointing to the potential

for further downside in yields, should convexity hedging come to the fore.