T-Notes went out near session lows.....>

US TSY/RECAP: T-Notes went out near session lows on Monday, with Tsys holding

lower in general as the curve ran a touch steeper on the day. Volume was limited

by widespread Asia-Pacific holidays, namely Japan & China, with Hong Kong closed

on Tuesday. Tsys extended to session lows on an address from ECB President

Draghi, as participants focused on comments centring on a "vigorous" underlying

inflation pick-up. Some noted that these comments were justification for the

ECB's most recent economic projections, as opposed to fresh information or a

recent trend, but Bunds & European FI held lower nonetheless.

- Tsys were reluctant to hold lower & bounced, although T-Notes were confined to

a tight range. The main trigger for the bid was an Axios headline that U.S. AG

Rosenstein gave his verbal resignation. This proved sketchy, although it does

seem that Rosenstein offered to resign & is now set to meet with Trump on Thurs.

- Heavy buying of TUZ8 was noted ahead of 2-Year supply. Looking at the auction

results, the cover ratio slid, as the auction tailed by 0.4bp. Dealer

participation ticked higher, moving above the recent auction average.

- T-Notes last 118.17, U.S. 10-Year cash Tsy yields closed at 3.089%.