T-Notes never looked like returning to......>

US TSYS: T-Notes never looked like returning to unch. levels & last deal +0-18

at 131-16+ in a headline light session largely driven by weekend news, namely

the escalation in the Sino-U.S. trade war. The market regained some composure

with Chinese VP Liu noting that China remains willing to resolve the dispute via

calm negotiations & as the PBoC seemingly widened the counter-cyclical adj.

factor in its latest USD/CNY fixing. Liu's comments provided some light pressure

before strong volume linked to cash lifted to fresh highs. The escalation in

trade matters far outweighed any of the rhetoric employed at Jackson Hole, with

most suggesting that Powell's address keeps further cuts well & truly in play.

- Flow wise we saw a TYV9 131.50/133.00 2x3 call spread seller & FVV9

119.00/118.75/118.50 2x1x1 put ladder on block.

- Yields down ~8.0bp across the curve at writing.

- London is out, cash Tsys will close until NY hours shortly.

- Increased tensions in Hong Kong & another North Korean missile launch were

also noted over the weekend.

- Durable goods data highlights the local U.S. docket on Monday.