Tsys have continued from where they left....>

US TSYS: Tsys have continued from where they left off last week, moving lower in

Asia-Pacific trade, with the front end leading the way, resulting in a modestly

flatter curve with 3-Year paper underperforming.

- Broader risk-on flows have been apparent, with little in the way of fresh

fundamental catalysts noted. Traders still seem happy to re-price an increased

chance of Fed hikes following the sharp adjustment that was seen in the early

part of last week on the back of the Italian political situation, with the

Eurodollar strip trading lower yet again.

- All of this comes despite the fact that US ComSec Ross' trip to China seems to

have yielded little in the way of progress.

- T-Notes operate around session lows as Europe comes in for business, with the

bulk of the Eurodollar strip a tick or so back from worst levels.

- It is worth noting that the FOMC is now in the "blackout period" ahead of next

week's MonPol decision.

- T-Notes last at 119.20+, US 10-Year Tsy yields closed at 2.917%.