Tsys extend overnight highs ahead......>

US TSY FLOWS: Tsys extend overnight highs ahead the NY open, even as equities

extend gains (SPX +10.25 at 2759.75). 

- Modest overnight volume from sidelined accts partially based on competing

headlines that Trump will sign bipartisan border funding deal and to avoid

self-imposed Feb 15 deadline, but potential for late hour rejection always a

potential. MNI poll sees near 45% expect Trump to reject deal but open door to

extending deadline, 26% expect Trump to accept deal as is while 21% see Trump

calling a national emergency. Only 4% expect a rejection and second government

shutdown. On another matter, Pres Trump weighing 60 day extension to March 1

deadline to end China tariff cease fire.

- Overnight flow includes leveraged acct buying in 2s-10s, swap-tied selling in

2s, carry-over deal-tied unwinds in intermediates but more expected today.

- On tap for Thursday: Aside from weekly claims, Final Demand PPI (0.1% est) for

January; Retail Sales (0.0%) for December; business inventories for November

(0.2%). Tsy cash/ylds: 2Y 99-30.25 (2.526%), 5Y 99-30.25 (2.510%), 10Y 99-14

(2.688%), 30Y 99-20 (3.017%).