T-Notes +0-01+ at 129-06. Tsys pushed.......>

US TSYS: T-Notes +0-01+ at 129-06. Tsys pushed higher Tuesday, T-Notes closed

just shy of highs as trade war matters remained at the fore. Slightly softer

than exp. CPI & weak real avg earnings also helped the bid, unleashing some real

money buying. BBG headlines pointing to U.S. tariffs on Chinese goods remaining

in play until after the U.S. elex & rocket attacks on a Iraqi military base

provided fresh support into close. It is questionable if the former was really

fresh news given recent comments from U.S. President Trump, mkt reacted anyway.

- Fed will continue to conduct 2x term repo ops p/week thru the end of Jan, at a

steady pace, offering $35bn at each op, before trimming op sizes to $30bn in the

4 Feb term ops scheduled through Feb 13 (fresh schedule announced after that, as

normal). Overnight repo op size unch. at $120bn. The Fed also plans "~$20bn in

reinvestment purchases & an additional ~$60bn in reserve management purchases of

bills over the noted monthly period," this was unch. as exp.

- PPI, Beige Book & Empire m'fing survey due Weds, with Fedspeak from Harker,

Kaplan & Daly due. Also on the lookout for Wall St. earnings, with issuance set

to pick up after more banks declare quarterly results.