US Tsys are trading modestly........>

US TSYS SUMMARY: US Tsys are trading modestly lower with 5-yr, 7-yr and 10-yr

yields circa 1bp higher while 2-yr and 30-yr are around 0.5bp higher. Bond

supply, no challenge to UK PM May's job for now and mixed data all appear to be

weighing on US Tsys.

- U.S Tsys edged lower during Asia as markets took solace in the lack of

escalation in the U.S.-China trade spat and there was no immediate threat to

oust PM May as Tory MPs agree to support her for now. A 5.0K lot seller pushed

T-Notes to Asian session lows, though the contract continued to operate in a

narrow band overnight.

- Tsys attempted at a recovery at start of London trade, but quickly fell to

fresh lows, under presser from move lower in German Bunds and UK Gilts as raft

European bond supply was seen weighing.

- Mixed UK data and then weaker than expected German ZEW helped Tsys bounce off

session lows, but selling pressure remained ahead of NY open. Attention now

turns to May JOLTS data and 3-yr note auction for $33bln.

- Eurodollar future strip is touch steeper with blues 0.5 to 1 tick lower