Tsy futures traded near session lows...>

US TSY/RECAP: Tsy futures traded near session lows ahead of the auction,

tentative risk-on following no developments with N Korea over the weekend (UN

vote on NK sanctions tonight) and the weakening of Hurricane Irma.

- Rates opened weaker on modest volume, partially following weaker EGBS,

sovereign peripherals were tighter vs. Bunds. No data and Fed in black-out

period ahead of Sep 20th FOMC tethered volume. 

- Pre-auction short sets, high-grade corporate issuance hedging added to

pressure as did rebound in the dollar, there was a strong rally in equities,

gold was weaker while oil surged off lows to 48.14. Better buying in wings,

T-bill proved quiet but had a better tone. The two-year notes drew buys. 

- Swaps had tighter levels, intermediates lagging wings by late morning, modest

flow included better payers in 5s, 7s and 10s. 

- Eurodollar futures also reversed Fri gains with heavy front end sales, over

100k Sep'16 98.68-.682. Rate hike remains 0.0% for next two FOMCs, Dec 13th FOMC

back up to 30% from 18.8% last week.

- T-Notes open Asia down 1 at 126.31, 10-Year yield last at 2.131%