Rising optimism with respect to a...>

US TSYS SUMMARY: Rising optimism with respect to a possible US-China trade

settlement is providing a lift to global markets, with equities in particular on

the front foot. President Trump has signalled he is willing to extend the March

1 deadline that will trigger higher tariffs on Chinese imports in a bid to

secure a deal.

- Although President Trump has been less than emphatic about the negotiated

bipartisan border funding deal, he has not explicitly ruled it out. A

breakthrough on domestic funding and bilateral trade with China, even if

fragile, would be a powerful tonic for markets.

- Price action for US TSYs has been relatively quiet, with trading in a tight

2bp range. Current yield levels: 2-year 2.514%, 10-year 2.682%, 30-year  3.021%.

- The Mar-19 TSY future trades at 121-30+ near the top of the morning range.

- Eurodollar futures are 0.5-3.0 ticks lower with reds/greens undeforming.

- Next up the data calendar will be CPI and Real Average Weekly Earnings at

1330GMT.