US Tsys trade higher, although T-Notes......>

US TSYS: US Tsys trade higher, although T-Notes failed to consolidate above

Monday's opening levels, and the space now operates shy of session highs.

- Risk off flows were noted after the U.S. Trade Rep confirmed earlier source

reports, stating that "as a result of China's retaliation and failure to change

its practices, the President has ordered USTR to begin the process of imposing

tariffs of 10 percent on an additional $200 billion of Chinese imports. This is

an appropriate response under the authority of Section 301 to obtain the

elimination of China's harmful industrial policies. USTR will proceed with a

transparent and comprehensive public notice and comment process prior to the

imposition of final tariffs, as we have for previous tariffs." A MOFCOM official

has reiterated that China will take countermeasures against U.S. protectionist

policies. As a reminder Trump has previously noted the potential to apply

tariffs on upto $500bn worth of Chinese goods.

- Participants look to U.S. PPI & a speech from NY Fed's Williams later today.

- T-Notes last at 120.09+, U.S. 10-Year Tsy yields last at 2.838%.