Modest risk-on flows have been apparent.....>

US TSYS: Modest risk-on flows have been apparent since the CME re-open, with

T-Notes coming under slight pressure after U.S. President Trump tweeted that

that the U.S. will delay tariffs on China, previously set for March 1. Trump

also reported "substantial progress" in trade talks with Beijing and said a

summit for Chinese President Xi and himself is planned for March, with the aim

of "concluding the agreement," based on "additional progress." This comes after

the trade talks were extended over the weekend. Markets continue to look for

greater clarity on the trade deal, particularly around the details of an

agreement surrounding FX. Friday saw a bid creep into Tsys late in the day,

although the curve still twist steepened. Fed Vice-Chair Clarida noted that the

Fed could allow inflation to run over the 2% as he gave a nod to the potential

for average inflation targeting, with the Fed set to conduct a broad review of

its policy framework. Friday also saw the release of the text of Fed Chair

Powell's semi-annual testimony to congress, which revealed little fresh.

- Clarida will speak again on Monday, with 2- & 5-Year supply also due.

- T-Notes last 122.01, U.S. 10-Year cash Tsy yields closed at 2.652%.