Tight re-open for T-Notes, -0-01 at.........>

US TSYS: Tight re-open for T-Notes, -0-01 at 128-20. Volume remained light on

Friday, although T-Notes managed to rally, going out just off best levels as the

curve steepened, with year-end extension/pension rebalancing flows in focus.

- China's PBoC decided to apply the LPR to existing floating rate loans over the

weekend, which BBG suggests could lower the costs of CNY152tn worth of loans,

getting some early interest in Asia hours. As are tensions in the Middle East,

after the U.S. military carried out "defensive strikes" on 3 Kataib Hezbollah

facilities across Iraq & Syria after after a U.S. civilian contractor was killed

in a rocket attack on an Iraqi military base on Friday.

- Over the the weekend the FT suggested that Goldman & JPM "have found ways to

keep trading in the $1.2tn US repo market while limiting regulatory burdens,

potentially easing a cash crunch at the turn of the year." Goldman supposedly

focused on "total return swaps," while JPM engaged in "sponsored repo" ops.

- Focus Monday falls on the Chicago PMI, advance goods trade balance, Dallas Fed

m'fing index & pending home sales. Monday's repo ops from the NY Fed will offer

a maximum of $230bn worth of liquidity ($110bn of which cover year-end).