*** Rates holding mostly higher.....>

US TSYS SUMMARY: *** Rates holding mostly higher into the close on decent volume

(TYH>1.59M), curves flatter/off lows. Certainly quietest day of wk despite large

flurry of data, not a good sign for an active Fri w/traders eyeing exits heading

ahead extended holiday weekend, Chinese New Year holiday's to temper next wk's

volume.

- Tsys pared gains after $7B 30Y TIPS auction, 2bps tail, awarded 1.003% rate

vs. 0.995% bid. Prior to auction, Tsys receded as US$ bounced vs. Yen on back of

Nikkei headlines "Japan Is Said to Consider Wakatabe for Senior BOJ Post:

Nikkei" Wakatabe has advocated for bolder monetary easing.

- Data, Wkly claims +7k to 230K vs. 280k est, PPI +.4%, inflation exp tempered

by Jan IP dip to -.1% vs. +.2% est.

- Flow included fast$ buyers in 10s, bank buying 30s post IP, fast- and real$

sellers in 10s near highs, mixed curve flow included 2s10s steepeners fading

move, 5s10s flatteners. Heavy option volume hedging quarterly rate hikes w/front

end well offered.

- Late ylds: 2Y 2.184%, 3Y 2.402%, 5Y 2.642%, 7Y 2.826%, 10Y 2.899%, 30Y 3.148%