Modest Risk-On, US$ Surge

Tsys traded weaker on an inside range day after selling off during London morning hours Monday. Mild early chop: Tsys bounced off lows but quickly retraced following early headlines US mulling new "action against Beijing" DJ reported. Equities pared gains briefly but bounced after IHS Markit Nov prelim US PMI showed fastest overall expnsn in over 5.5 yrs, composite 57.9 from 56.3 in Oct. US$ Bounced to multi-yr high.

• Heavy volumes tied to lead quarterly roll, not the headlines for once, FV and TY saw over 1M rolls before the closing bell.
• Mixed auctions: US Tsy 2Y Auction Stopped Out: US Tsy $56B 2Y Note (91282CAX9) draws 0.165% (0.151% last month) vs. 0.167% WI, bid/cover 2.71 vs. 2.41 previous. US Tsy $57B 5Y Note auction (91282CAZ4) tailed .7bp , drawing high yld of 0.397% (0.330% last month) vs. 0.390% WI; 2.38 bid/cover vs. 2.38 prior.
• Light option volumes while supra-sovereign drove US$ debt issuance, Peru issuing $4B over 3 tranches longest of which out to 100Y.
• Tsy 2-Yr yield is up 0.6bps at 0.1635%, 5-Yr is up 1.5bps at 0.386%, 10-Yr is up 3.1bps at 0.8553%, and 30-Yr is up 3.9bps at 1.5589%.