US TSYS: Bull Flatter Before A Busy Docket w/ Retail Sales, Fedspeak 3Y Supply

Treasuries are bull flatter ahead of a busy docket, continuing to pull off a low for Treasuries in yesterday’s overnight session that came as China was said to have asked banks to limit their holdings of US Treasuries. Yesterday’s additional early downward pressure from JGBs following Takaichi’s victory on Sunday reversed today. Note that in addition to a heavy data docket headlined by retail sales and likely hawkish Fedspeak, 3Y supply will be watched for signs of broader appetite after last month's drop in indirect take-up. 

• Cash yields are 0.8-2.9bp lower, with declines led by 30s and the front-end still somewhat pinned ahead of NFPs on Wednesday and CPI on Friday.
• TYH6 trades at 112-09 (+03) close to earlier highs of 112-10+, on reasonable cumulative volumes of 320k.
• Resistance is seen at 112-16+ (Feb 6 high) before 112-22 (Jan 7 high). However, a bearish medium-term condition should still see some attention on support at the bear trigger of 111-09 (Jan 20 low) after yesterday’s drop to 111-26.
• Data: NFIB Jan (0600ET – 99.3 vs 99.8 expected), Weekly ADP (0815ET), Retail sales Dec (0830ET), Import/export prices Dec (0830ET), ECI Q4 (0830ET), Weekly Redbook (0855ET), Business inventories Nov (1000ET)
• Fedspeak: Hammack (1200ET), Logan (1300ET) – see STIR bullet
• Coupon issuance: US Tsy $58B 3Y Note auction - 91282CQA2 (1300ET). Last month's 3Y traded almost in-line with a 0.1bp stop thrhough and steady bid-to-cover at 2.65x. The most interesting aspect was a drop in the indirect take-up from 72.0% to 56.5%, its lowest since Jul/Aug 2025 and before thath Dec 2023.
• Bill issuance: US Tsy $90B 6W bill auction (1130ET)
• Politics: WH Press Sec Leavitt press briefing (1300ET), Trump in signing time (1630ET), Trump in policy meeting (1730ET), Trump in private dinner (1900ET)