T-Notes operate a touch below settlement....>

US TSYS: T-Notes operate a touch below settlement levels after the contract went

out near lows on Tuesday, last dealing -0-02 at 127-07+. Monday saw the belly of

the curve slightly underperform. Fed's Harker pointed to no need for a change in

rates in a WSJ interview. Harker leant on the "apparent strength of the U.S.

economy," though he conceded that "slowing global growth & uncertainty over

trade policy have created clear risks to that outlook." Elsewhere, fellow

non-voter Bostic noted that the Fed is debating the risks & benefits of letting

the econ run "a little hotter."

- The latest 3-Year auction was virtually on the screws, with the cover ratio

easing, while dealer & direct participation ticked up as indirect participation

slid from last month's lofty levels.

- Pricing of the Fed's July meeting remains in focus, with OIS now back to a 98%

chance of a 25bp cut from the Fed later this month, with the remaining 2%

attributed to an unch. outcome, a very different outlook pre-NFP.

- Fed Chair Powell's appearance in front of the House Fin'l Services Panel & the

release of the minutes from the Fed's most recent decision headline Wednesday.