Tsys have come under some modest pressure...>

US TSYS: Tsys have come under some modest pressure during the latter half of the

Asia-Pacific session, although T-Notes still trade higher on the day, supported

by hawkish trade rhetoric from U.S. VP Pence re: China over the weekend, while

the APEC summit failed to result in a common communique, with trade war matters

causing issues.

- The curve sits a touch flatter, bear flattening on the day.

- As a reminder, Tsys finished higher on Friday, with the belly outperforming.

Fed's Clarida sounded more cautious about the econ, before a WSJ interview with

Fed's Harker crossed noting that "he isn't ready to support the central bank

raising short-term interest rates again next month, given the modest outlook for

inflation." N.B. Harker doesn't vote until '20 & has prev. highlighted a

preference for 3 hikes in total during '18.

- Durable goods & flash PMIs highlight the U.S. economic docket during this

holiday shortened week, with Fed's Williams due to speak on Monday.

- T-Notes last 119.06, U.S. 10-Year cash Tsy yield last 3.070%.