Futures trade heavy with a focus on.........>

US TSYS: Futures trade heavy with a focus on Brexit developments, even as some

of the Eurosceptic wing of the UK's ruling Conservative party remain cautious

over the "progress." BBC sources suggested that AG Cox is "agonising" over

whether to alter his legal advice on the deal. Press conference between UK PM

May & EU's Juncker pointed to no further negotiations, and the temporary nature

of the backstop, as well as the good nature of the backstop & arbitrary measures

if the good-faith of the backstop is breached if ever enacted. T-Notes have

traded through Monday's low on the optimism.

- U.S. retail sales provided a beat on Monday, although Dec's numbers were

subject to negative revisions promoting dip buying. Equities then moved higher,

applying pressure to Tsys, with Brexit matters supporting broader risk-on flows.

- The latest 3-Year auction provided a 0.4bp tail, with the cover ratio holding

steady, in line with the prior and recent auction averages. Direct participation

eased a touch, with dealers and indirects more active this time around.

- Eurodollar futures trade 0.5-3.5 ticks lower through the reds.

- T-Notes last 122.14+, U.S. 10-Year cash Tsy yields closed at 2.639%.