Yld Curves Bear Steepen Ahead Heavy Data Docket Wednesday

Tsys holding modestly mixed levels after the bell, near top end narrow range since midmorning, yield curves bouncing off deeper inverted levels (2s10s +7.413 at -66.082). Tsys mirrored similar moves in German Bunds in early trade, gapped higher after Bbg story hit wires: "ECB Starts to Ponder Slower Hikes After Half Point in February".

• Tsys extended past early overnight highs (30YY slips to 3.6135% low vs. 3.6948% high) following the headlines while equities bounced to new session highs briefly before moving back to early session range.
• Muted react to limited data (NY FED EMPIRE STATE MFG INDEX -32.9 JAN) participants plied the sidelines ahead Wednesday's heavy data docket that includes Retail Sales, PPI, IP/Cap-U, Business Inventories, Net TIC flows.
• Fed Funds implied hikes have shifted lower, continuing through the session after a sizeable miss for the admittedly volatile Empire mfg index.* 27bp for Feb 1 (unch from Fri close), cumulative 46bp for Mar (-1bp), 57bp to 4.90% terminal in Jun (-2.5bp) before 48bp of cuts to 4.42% for Dec (-5.5bp).
• Comes ahead of the BoJ overnight and tomorrow's stacked docket including multiple important data releases, four Fed speakers (incl Bullard at 0930ET not showing on BBG calendar) and the Fed Beige Book.
• Equity earnings resume, Goldman Sachs just annc ($10.59B 4Q rev vs. $10.7B est, $3.32 EPS), Morgan Stanley (sales & trade rev's $1.42B vs. $1.68B est);, UAL and Interactive Brokers after the close. Earnings on tap early Wednesday: Charles Schwab, Prologis Inc, JB Hunt Transport, PNC Financial Services.