T-Notes +0-01+ at 128-13+ as we write. -....>

US TSYS: T-Notes +0-01+ at 128-13+ as we write.

- Light twist flattening of the curve was the order of the day on Thursday, with

a strong 7-Year auction (hot on the heels of Tuesday's strong 5-Year offering)

allowing T-Notes to go out just shy of late highs, even with U.S. equity markets

advancing. Volume remained subdued owing to the holiday season.

- The latest Fed repo operation covering year end was undersubscribed (for a

third consecutive time).

- Also worth flagging an erroneous story from the NHK wire which hit on

Thursday, pointing to a North Korean missile launch, later corrected. Reminder

that participants are on watch, after the Christmas "gift" warning from the Asia

state. Tuesday saw President Trump note that the U.S. would deal "very

successfully" with such a move, while Thursday saw the U.S. fly spy planes over

North Korea.

- Elsewhere, MOFCOM noted that China and the U.S. have been "closely

communicating" on issues related to signing the interim trade deal.