T-Notes last -0-02 at 128-20 after Tsys.....>

US TSYS: T-Notes last -0-02 at 128-20 after Tsys surged in late NY trade, adding

to the bid from earlier in the session as yields registered fresh cycle lows

across the curve. The trigger for the run higher was President Trump tweeting

"the U.S. will start, on September 1st, putting a small additional Tariff of 10%

on the remaining 300 Billion Dollars of goods and products coming from China

into our Country. This does not include the 250 Billion Dollars already Tariffed

at 25%." Trump later noted that this could be scaled up in steps, but did also

point to the possibility of doing less re: tariffs, contingent on trade talk

developments. The Editor of China's Global Times suggested that "the Chinese

will no longer give priority to controlling trade war scale, they will focus on

the national strategy under a prolonged trade war."

- Trump's tweets could be viewed as a way to force the Fed's hand re: rate cuts

after Fed Chair Powell referred to overseas risks several times on Wednesday.

- The curve bull flattened on the day, with late 2s/5s flatteners blocked.

- M'fing ISM disappointed on Thursday, with the headline missing.

- NFPs provide the major risk event on Friday, alongside any Chinese response.