T-Notes have eased back from the early......>

US TSYS: T-Notes have eased back from the early session peak but still hold

above Thursday's best levels, +0-05 at 130-02. Curve bull steepened, marginally.

The yuan fix & PPI deflation in China had no notable effect on the space.

- Light in the way of broader risk drivers in Asia, after the smattering of risk

evident in the latter part of the NY session. The upside impetus was provided by

the latest BBG sources piece re: the trade war which noted that "the White House

is holding off on a decision about licenses for U.S. companies to restart

business with Huawei after Beijing said it was halting purchases of U.S. ag

goods." This came in the wake of Italian Deputy PM calling for a snap election.

- To recap a degree of concession crept in to make room for the latest round of

30-Year supply. While a tail was apparent at auction (1.2bp) it was narrower

than feared, as the cover ratio printed in line with recent avgs & dealer

participation eased, which allowed a base to built.

- Highlight on the flow front was a block trade which saw the USV9 158/155 1x2

put spread blocked in 5.0K x 10.0K vs. 4.0K of the USU9 165.00 calls.

- Eurodollar futures deal 0.5-2.0bp higher through the reds.