Tsy yields softened on the day, with...>

US TSY/RECAP: Tsy yields softened on the day, with the shorter end of the curve

experiencing some modest outperformance, while T-Notes closed off of best

levels, although still higher on the day. While Brexit debate and resignation

watch was USD positive earlier, U.S. mkts insulated for much of the session.

What really got domestic markets moving was trade tariff headlines.

- Decent risk-on move was seen with equities making new session highs after FT

reports re: Lighthizer comments that some tariffs on China are already on hold

(denied late in day). Risk-on was then scaled back after Trump admin Ross

headline: "U.S. still plans China tariff increase to 25% in January" hit BBG.

- Fed's Bostic & Kashakri came down on the dovish side, while Fed Chair Powell

noted that the Fed will launch a broad review of how it conducts policy &

conveys what is doing to the public during 2019. Fed's Evans due to speak Fri.

- Notable flow 5s30s steepener Block 1351:22ET (+11,430 FVZ 112-20.25 buy

through -19.5 post time offer vs. * -3,000 USZ 138-26, bid). Heavy Eurodlr, Tsy

option flow also observed.

- T-Notes last 118.26+, U.S. 10-Year cash Tsy yields closed at 3.110%.