Tsys witnessed a rather limited start to....>

US TSYS: Tsys witnessed a rather limited start to the Asia-Pac session in the

wake of the latest round of FOMC meeting mins & subsequent comments from Fed

Vice Chair Clarida. Fed's Daly then alluded to familiar headwinds, while

stressing that there is no sign that the U.S. is nearing a recession. She also

suggested that rates are very close to neutral & that she doesn't want balance

sheet matters to offset interest rate policy.

- Activity then picked up on the back of a RTRS sources piece which suggested

that the U.S. & China are drafting 6 MOUs on key structural issues including IP,

services, tech transfer, agriculture, currency & non-tariff barriers in their

trade talks. The report also suggested that negotiators are looking at a 10-item

list of shorter-term measures to address the bilateral trade imbalance. This

triggered broader risk-on flows, sending T-Notes back towards Tuesday's lows,

with the belly of the cash curve underperforming.

- RTRS sources then flagged heightened Sino-Aussie trade tensions, capping risk.

- The white and red Eurodollar contracts trade 0.5 to 1.0 tick lower.

- T-Notes last 122.03, U.S. 10-Year cash Tsy yields last 2.657%.