Tsys weaker, near session lows after...>

US TSY FLOWS: Tsys weaker, near session lows after midday. Rates extending lows

through midday/risk-on tone gelling as S&P futures recovered early losses/traded

higher w/DAX futures. Eq bid also partially tied to WSJ article China looking to

moderate trade threats "soothe relations w/US multinationals" 

- Little react as data picked up (Redbook retail sales, wholesale inv's/sales,

JOLTS); Tsy held lows after $35B 3Y auction tailed slightly, awarded a 2.821%

rate vs. 2.820% WI.

- US$ volatility O/N, dollar index well off O/N lows DXY +.024, 95.174

(94.882L/95.353H), $/Eur -0.0003 at 1.1590, $/Yen +.43 111.56; equities

weak/near firm (emini +9.0, 2889.25 vs. 2867.25L); Gold firm (XAU +1.54,

1197.41); West Texas crude surged as Hurricane Florence threatened Eastern

seaboard (WTI +1.83, 69.37). 

- Flow included fast- and real$ buyers on lows in 5s, 10s and 30s. Prop accts

2-way in short end, pre-auction and corp-deal-tied hedging in mix. Curve

steepeners via options and futures (2s10s). Tsy cash/ylds: 2Y 99-24.75 (2.744%),

5Y 99-14.5 (2.867%), 10Y 99-04 (2.975%), 30Y 97-19.5 (3.123%).