Risk-Off Ahead Extended Holiday Weekend

Rates firmer after the bell Friday, near the mid-session range, a mild risk-off tone with equities weaker but off lows (ESH1 -20.0).

• Underscoring tone: heavy first half data included ugly Dec Retail Sales (-0.7% vs. 0.0% est) combined w/ other poor data this wk including jobless claims, suggests that economic activity at the end of the year was weaker than expected.
• Moderate volumes (TYH1>1.22M) two-way with better buying from prop and real$ in belly to long end earlier. Second half much more subdued as US accts looked forward to extended three-day holiday weekend ahead next week Wednesday inauguration for President-elect Biden.
• Ongoing headline risks: threat of violent protest in state capitols across the US not just DC, Covid items: vaccine inventory concerns weighed on equities (as did bank shares after earnings started to roll).
• The 2-Yr yield is down 0.4bps at 0.135%, 5-Yr is down 3bps at 0.4533%, 10-Yr is down 3.4bps at 1.0954%, and 30-Yr is down 2.3bps at 1.8493%.