Tsys reversed early gains following....>

US TSY FLOWS: Tsys reversed early gains following better than expected Dec

retail sales data, rates finishing on an inside session range on decent two-way

flow and corporate issuance hedging with another $21B on the day helping create

some second half chop. Other items of note: USMCA trade deal passed Senate in

89-10 vote, while the BLS and Commerce dept anncd the elimination of computers

from data lock-ups as of March 1.

- Futures blew past overnight lows post data, w/equities grinding to new highs

through the day. Yld curves rebound steeper (3M/10Y +3.382 at 25.443). Sources

reported better fast and real$ selling on move, prop buying intermediates more

recently. second round of duration selling around midday as Yen moved higher.

- Large 2s5s steepener block: +16,379 TUH 107-23.25, through 107-23-38 post-time

bid; -13,289 FVH 118-27.25, through 118-28.25 post-time bid and session low of

118-28. Swap spds held modestly tighter amid better receiving in 2s-3s last few

hours, 2-way in 5s, payer in 7s and 10s, 3s4s5s receiver fly, deal-tied hedging

in the mix. The 2-Yr yield is up 0.8bps at 1.5617%, 5-Yr is up 2.1bps at

1.6198%, 10-Yr is up 2.1bps at 1.8039%, and 30-Yr is up 1.8bps at 2.2536%.