U.S. Tsys moved a touch lower with modest...>

US TSYS: U.S. Tsys moved a touch lower with modest risk on flows noted after

China stated that it will retaliate to U.S. tariffs after the first round of

import duties went into play at midnight E.T. While this may seem contradictory

to the common thought process, the move was expected and didn't lead to any

immediate escalation in rhetoric from Chinese policymakers.

- Tsys had hovered around closing levels after the curve finished flatter on

Thursday.

- The Fed Minutes showed that almost all participants wanted a rate increase in

June, but one participant would have preferred to wait to allow inflation exp.

to rise to levels consistent with the Fed's goal. Most participants noted

"uncertainty & risks associated with trade policy had intensified" & suggested

that could eventually negatively impact business sentiment & investment,

pointing out that contacts in some districts had already scaled back capital

spending plans due to these concerns.

- U.S. NFP provides the highlight on Friday.

- T-Notes lost at 120.07, U.S. 10-Year Tsy yields last at 2.845%.