Tsys trade weaker after the bell,......>

US TSY FLOWS: Tsys trade weaker after the bell, lower half of session range, yld

curves flattening w/intermediates underperforming (5s30 -3.103 at 38.232).

Rather muted day on deceptively heavy volume (TYH>1.67M). Risk-on/off/on

session, equities recover late after reversing early gains into midday. Headline

watching: Chuck and Nancy have school-yard spat w/Trump of border wall. GBP/US$

makes new lows after no-confidence vote threshold (>48 letters) for May met.

-  Salient data highlights for Wednesday (estimates): Nov CPI (.3% prior, 0.0%

estimate); $24B 10Y note auction. Tsy $38B 3Y note auction (9128285R7) tailed

slightly, awarded a 2.748% rate vs. 2.745% WI going into auction (2.983%

previous) w/bid/cover 2.59 vs. 2.54 previous (3.09 avg).

- 2Y swap spds narrow again,underlying factors remain: year end funding pressure

for banks w/higher LIBOR sets, forced liquidations and/or deleveraging chatter

on Risk-parity accts. Note, balance of spds wider, but appr 1.0 bps off highs as

well. Couple that with global political, trade and govy shut-down risks, and

long end inversion can easily leak back into 10Y spd. Tsy cash/ylds: 2Y 99-30.5

(2.750%), 5Y 100-19.25 (2.743%), 10Y 102-03.5 (2.877%), 30Y 104-26.5 (3.125%).