Tit-for-tat tariff tantrum..........>

US TSYS SUMMARY: Tit-for-tat tariff tantrum spurring safe haven bid in rates,

heavy futures volume (TYU>610k); US$/Yen fell back to year lows in concert

w/headlines (109.83 last, -.72), global equities off hard on trade spat

- US$ index firmer (DXY +.457, 95.213); equities slammed (emini -35.75, 2744.0);

gold weaker (XAU -5.25, 1273.03); West Texas crude weaker (WTI -1.11, 64.74).

- Asia, China returns from extended holiday to face sharply lower stocks (ZTE

down over 20%) as U.S. Pres Trump threatens another $200B in tariffs late Mon.

Heavy Tsy buying across the curve from fast$/real$, props and bank portfolios,

buy-stops triggered along the way, two-way curve flow.

- London, flood of Tsy buying tapered into the London open, still better buying

but tempered by profit taking in belly from fast$/real$ and props, carry-over

2-way curve flow, bank and insurance portfolio buying long end

- Swaps, spds mostly wider, short end leading amid better flattener trade

(2s10s), outright payers 2s and 5s. Eurodollar futures, EDU8 bid evaporates on

higher 3M LIBOR set (+0.0055 to 2.3302%, +0.0043/wk). Tsy cash/ylds: 2Y 99-30.75

(2.516%), 5Y 100-00 (2.748%), 10Y 99-31.5 (2.875%), 30Y 102-08.5 (3.008%)