Treasury yields are lower on........>

US TSYS SUMMARY: Treasury yields are lower on Monday, led by a strong 30Y UST,

which is 3.3bp lower. Indeed, there is a bullish flattening in all the major

yield curves without an obvious driver. UK politics are attracting attention.

- The 2-10Y UST spread has fallen to 119.5bp, a 2.5bp decline on the session but

still short of the multi-year low of 114.6bp seen last week. 

- Swap activity is decent with a particularly large 3-4-5Y fly in 190k+, which

looked like a payer of the belly. 

- The EURUSD 5Y cross currency basis swap is slightly lower again today to

-37.25bp at the lowest level since March. This and the heavy sovereign European

issuance calendar this week might deflect any high grade issuers to dollar.

However, corporate issuance activity is looking subdued in the European time

zone.

- This week, the big data release is CPI on Wednesday, which comes after several

months of underwhelming inflation readings. There is little scope for the market

to price in a greater probability of a rate hike in December (PINCH shows 90% is

discounted) but the pace of hikes in 2018 is still rather slim at around 34bp.