BMO's Aaron Kohli noted on 5Y/30Y Tsys......>

US TSYS: BMO's Aaron Kohli noted on 5Y/30Y Tsys curve that "we're still watching

key levels" with "a nearby channel top at 64 bp and a prior (broken) channel

bottom at 75 bp which would provide a better entry for flatteners. Because we

see a good deal of the curve move as coming from a positions washout especially

at the very long-end of the curve, the move could have some legs." (The 5/30Y

curve is now at 62.80 bps, steeper by 2.70 bps on day.)

- He eyed a Tsy futures chart of "longs in the 30-year (US Contract) through

Tuesday of last wk (Dec.12) with shorts as a % of open interest close to record

highs. The data from Tuesday to Friday suggested new longs coming into the

market, and some of those longs closing this week. That leaves the market still

offsides and steepening for now, a trend we're happy to let play out before we

reload on our fundamentally driven flattening view. To be clear, we still see a

flat/inverted curve as very likely in the coming quarters, but would be happier

with a better entry on our flattener once the early optimism and technicals give

way to reality."