Very quiet start to the week with......>

US TSY FLOWS: Very quiet start to the week with little data and no Fed speak

Monday, many opting to ply the sidelines to await Tue's heavy data drop and

multiple Fed speakers. Rates started session weaker on light volume due to Japan

out for one-day holiday. Low participation on narrow ranges after the initial

bounce carried through the closing bell.

- Yld curves bull flattened, unwinding small portion of last week's steepening

(3M10Y -3.052 at -4.068); equities pared gains and drifting near steady in late

trade (ESU9 +.50 at 3016.25).

- A 25bp cut end of July is still 100% priced in while a 50bp cut that had risen

to over 25% from 0.0% after the Fed chair's testimony last week, has declined

back to 18% (according to MNI's PINCH model) today. For the balance of 2019,

MNI's PINCH model shows chances of a second 25bp cut at the Sep FOMC at 100%,

while Dec chances of third 25bp cut are at 69.9% vs. 45.0% a month ago.

- Decent option volume, strike roll-up and out positioning in Eurodollar options

- The 2-Yr yield is down 1.8bps at 1.829%, 5-Yr is down 2.7bps at 1.8444%, 10-Yr

is down 3.3bps at 2.0887%, and 30-Yr is down 3.7bps at 2.6099%.