UST's endured a sharp sell late in trade....>

US TSYS: UST's endured a sharp sell late in trade on Friday as government

negotations to secure a stop gap funding bill failed, leading to a goverment

shutdown. T-Notes off session lows early in Asia but still down 5 ticks at

122.03+. The House and the Senate continued to negotiate over the weekend. The

latest reports from the US cite Senator Thune who says hopeful a deal can be

done on Sunday night to reopen the government with a 3-week spending bill.

However, Senator Cornyn has said he thinks the government will remain shut on

Monday.

- US 10-Year yield cheaper by 3bps on the day breaching 2.65%, testing levels

not seen since Sept 2014. 

- The dollar rose slightly on Friday, but couldn't edge into positive territory

for the week, retreating around 0.5% on a 5 day basis. This denotes the 6th

consecutive week of declines and matches the longest run of losses since 2010.