Tsys well supported by the bell,.......>

US TSY FLOWS: Tsys well supported by the bell, more risk-on unwind than a

concerted risk-off move w/equities still hovering in positive territory late. 

- Bull curve flattening on very light volume (TYU<865k by the bell), quiet start

to the week despite continued geo-pol concerns. Short end now pricing in appr

46% chance of 50bp rate cut at July 30-31 FOMC meet. Dallas Fed Pres Kaplan rged

policymakers to allow events to unfold before lowering interest rates, adding

it's too early to judge whether trade tensions and a global economic slowdown

will cause a material deterioration in the U.S. outlook.

- Rates extended session highs into midday, no specific driver for general

risk-on unwind tone. Light prop and fast$ selling into latest move. Yld curves

mostly/mildly steeper, exception is 3M10Y collapsing.

- Tsys receded briefly in late trade but rebounded on block buy 9,407 TUU at

107-21.62, likely swap related as front end spds neared inversion for the first

time ever.

- The 2-Yr yield is down 2.9bps at 1.7385%, 5-Yr is down 4bps at 1.7508%, 10-Yr

is down 3.5bps at 2.0194%, and 30-Yr is down 3.6bps at 2.5479%.