T-Notes finished near the bottom of....>

US TSY/RECAP: T-Notes finished near the bottom of their range Tuesday, with the

curve running flatter on the day. Truth be told it was a rather muted day on

deceptively heavy volume (TYH>1.67M). Risk-on/off/on session, as equities

recovered late after reversing early gains. Late $600k/DV01 block trade in TUH9

helped underpin flattening.

- U.S. President Trump is seemingly willing to shut down the U.S. government

over border issues.

- 0.3bp tail noted on the latest 3-Year note auction, cover ratio held steady,

below recent averages. Direct bidders took down the largest share seen at a

3-Year auction in over 2 years, with indirect participation also moving higher,

as dealer participation fell to the lowest level seen since Jan's 3-Year supply.

- 2-Year swap spreads narrowed again, underlying factors remain: year-end

funding pressure for banks w/higher LIBOR sets, forced liquidations and/or

deleveraging chatter on risk-parity a/c's.

- Focus Wednesday moves to U.S. CPI data & 10-Year supply.

- T-Notes last 120.13+, U.S. 10-Year cash Tsy yield closed at 2.879%.