Treasuries open NY higher, but......>

US TSYS SUMMARY:  Treasuries open NY higher, but slightly off risk-off rally

price highs hit after N.Korea overnight fired missile that traveled over Japan;

cash 10Y yield 2.11% vs. day's low yield of 2.088% set at 4:15am ET. Tsy sells a

1pm ET $28B 7Y note auction.

- TOKYO: Tsys had immediate risk-off buying after N.Korea missile landed in sea

near Hokkaido; cash Tsys buy-stops hit, fast- and real$ bought 5s and 10s. Bank,

insurance portf buying in 30s, and FX-tied buying as USD weak vs Yen;

short-covering. Asia, Japan asked for emergency UN Security Cncl mtg; US Pres.

Trump, Jpn PM Abe spoke for 40 minutes; China urged restraint. 

- LONDON: Tsys rose as UK banks back after Mon holiday, risk-off rally on

N.Korea. Tsys ebbed off high since 4am ET highs in mild profit tkg by fast$,

props in 10s and 30s; bank portf selling in 5s and 10s. 

- US SWAPS: Sprd curve steepens, more front end receiving.

- US HIGH-GRADE CORPORATE BOND ISSUANCE: No issuance Tue: risk-off mood and

vacation-thin syndicate desks; Sept pipeline builds though. 

- OVERNIGHT REPO: Tsy 2Y, 3Y, 5Y and 10Y Notes all traded tight.