T-Notes turn bid in early Asia & briefly....>

US TSYS: T-Notes turn bid in early Asia & briefly threaten to break Monday's

high, last +0-05+ at 127-27+. This comes on the back of BBG headlines noting

that the U.S. TR has proposed adding tariffs to a further $4bn worth of EU goods

based on the aircraft subsidy issue. Many mkt watchers had speculated that the

the U.S. China "trade truce" may result in Trump turning his eye to the EU.

- Monday saw T-Notes close off lows. The U.S.-China "trade truce" & developments

surrounding North Korea applied pressure in Asia hours, before soft Chinese data

tempered the move. Soft EZ data put a fresh bid into the space before a stronger

than exp. ISM m'fing headline print applied some pressure, although the

breakdown was less inspiring, which limited the initial knee-jerk reaction. Tsys

then faded into the close, with the curve finishing a touch flatter on the day.

- Vice Chair Clarida offered little new in an address, while Barkin told the WSJ

that "we're still in a very sound place. I think emotions have gotten far out in

front of the data in terms of where we sit in the economy." Stressing that "it

was too soon to say whether global economic weakness would compel the central

bank to cut interest rates at its next meeting."