T-Notes operate back from best levels.......>

US TSYS: T-Notes operate back from best levels after the initial bid tone

stemming from the U.S.-China trade situation waned, although the overnight tone

was distinctly risk-off. Some pointed to White House Economic advisor Kudlow's

weekend acknowledgement that Trump & Xi will likely meet at June's G20 summit as

a "worst case averted" signal. Focus now moves to a firming up of a date for a

return round of trade talks in Beijing, and the tone of ongoing U.S. & Chinese

comments, with both nations seemingly content to blame one another for last

week's events at present. Trump has been his usual combative self via Twitter,

with BBG sources suggesting that the U.S. has given China 3-4 weeks to come to a

deal or face tariffs on the remainder of its exports to the U.S. China has

outlined its 3 requirements re: a trade agreement, and stressed that the door is

open to the U.S. but cautioned that it will not buckle on matters of principle.

- T-Notes last 124.04, while yields trade 2.3-3.5bp lower across the curve, with

the belly leading. U.S. 10-Year cash Tsy yields last 2.435%.

- Eurodollar futures trade unchanged to 3.0 ticks higher through the reds.

- Focus today moves to comments from Fed's Clarida, Rosengren & Kaplan.