T-Notes operate a touch above settlement,...>

US TSYS: T-Notes operate a touch above settlement, drawing support from a modest

downtick in U.S. equity index futures, as well as the Nikkei 225 pairing its

early gains. Yields trade 1.1-1.2bp lower across the curve at writing.

- Fed dove & non-voter Kashkari stuck to his usual cautious message in early

Asia-Pacific hours. That came after Fed voter George elaborated on recent

cautious comments in a WSJ interview Wednesday, noting that the central bank's

shrinking portfolio of bonds may be a "fair explanation" for what's driving

stock volatility. "This idea that it was like paint drying, I didn't really

embrace that."

- Elsewhere general worry re: trade matters surrounding Huawei & ZTE, in

addition to talk of a delay in U.S. trade talks with both the EU & Japan,

weighed on risk.

- Eurodollar strip trades unch.-1.5 ticks higher across the whites and reds.

- Focus today moves to an address from Fed's Quarles, while Williams & Harker

will speak Friday, ahead of the Fed's Blackout.

- T-Notes last 121.27+, U.S. 10-Year cash Tsy yields last 2.711%.