A warmer risk backdrop during the 2nd.......>

US TSYS: A warmer risk backdrop during the 2nd half of Asia-Pac trade allowed

T-Notes to move away from Thursday's late session high, aided by a 6-month high

for the Chinese Caixin services PMI, MOFCOM confirming that China & the U.S.

will hold vice-min level talks re: trade on Jan 7-8 & news that the Japanese

MoF, BoJ & FSA are set to convene re: financial markets. The former two pieces

of news flow pushed U.S. stock futures into +ve territory. T-Notes trade a

couple of ticks above session lows last. Curve bear flattened.

- Couple of block trades noted. TYG9 121.00/123.50 call spread 5.0K blocked at

1-46/64, sources point to a seller, followed by TYH9 120.50/121.50 1x2 call

spread 3750 blocked at 1-3/64. Elsewhere option flow favoured downside plays.

- White & red Eurodollar contracts trade 1.5-3.0 ticks lower on strong volume.

- NFPs, ex-Fed Chairs Bernanke & Yellen interviewing current Fed Chair Powell &

a meeting between Trump and congressional leaders headline Friday (Dem led house

passed funding bill overnight that didn't include wall spending, Senate won't

vote on it, Trump would veto). Fed's Bostic & Barkin also due.

- T-Notes last 122.29+, U.S. 10-Year cash Tsy yields last 2.576%.