Belly-Led Cheapening In Wake Of Retail Sales

T-Notes flat at the re-open, dealing -0-01 at 133-02, after finishing off of lows on Thursday.

• Stronger than expected retail sales data was the major driving force behind the cheapening witnessed on Thursday, with the belly leading the way lower as 5s and 7s cheapened by ~4.5bp come the bell, although the major Tsy benchmarks recovered from their post-retail sales extremes. Option flow of note including notable screen buying of the TYV1 134.50 calls (targeting a move to ~1.15% in yield terms), with a ~4.0K screen lift of the USX1 166.00 calls also observed (targeting a move to ~1.75% in yield terms).
• There is nothing in the way of notable tier 1 risk events slated for Asia-Pac hours, while Friday's NY docket will be headlined by the latest prelim UoM sentiment survey.