US Tsys have slipped lower from.....>

US TSYS SUMMARY: US Tsys have slipped lower from Wednesday close on hope that

US/China trade dispute does not escalate further. 10-yr Tsy yield is 1.1bp

higher at 2.86% with yield curve modestly bear flattening as short-end comes

under most selling pressure with 5s/30s 0.8bp tighter at 19.2bps.

- In Asia Tsys edged lower on back of late Wednesday comments from White House

on possible further US/China trade talks. Sources note pretty one way flow, with

asset managers seen selling the 7-10 Year part of the curve, with decent paying

in U.S. 10-Year swaps out of Japan, and some paying of the long-end vs. the

belly of the curve as fast money looked to put on steepeners before the 30-Year

auction later today.

- Tsys attempted a recovery at start of European session as Bunds/Gilts squeezed

higher on back of surprise downward revision to French HICP and spurious

headline that Trump threats to leave NATO, but move higher petered out.

- Euro$ strip is touch steeper as blues fall 2/2.5 ticks, while whites are

0.5/1.5 ticks lower. Both swap spreads and breakevens are little changed.

- Attention now turns to US June CPI data at 0830ET and $14B 30Y bond auction