Rates trade higher, Tsy futures........>

US TSY FLOWS: Rates trade higher, Tsy futures at/near highs post BoE annc,

knock-on risk-off tone trails higher EGBs after European Comm and BoE lowered

economic forecasts. Tsy yld curves actually firming up last hour as short end

continues to gain. Note, Eurodollar front quarterly EDH9 surged +0.030 after 3M

LIBOR set' tumbled -0.0406 to 2.6970% (-0.0356/wk).

- Off overnight highs, US$ index has climbed back to Jan 25 levels (DXY +.125,

96.515 vs. 96.673H) when US Gov re-opened when index fell from 96.528 to 95.738.

Equities currently weaker, near lows (SPX -16.5 2713.0).

- Overnight flow, modest two-way overnight, volume picking up into the London

crossover and EC forecasts. Sources note early bank portfolio selling 3s,

official acct buying 7s, two-way in 10s; fast- and real$ buying shorts to

intermediates w/prop accts more recently. On tap for Thu: Weekly claims (221k

est); consumer credit for December ($16.5B); $19B 30Y bond auction (912810SF6).

Dal Fed Pres Kaplan, Fed Brd Gov VC Clarida and StL Fed Pres Bullard speak at

separate events. Tsy cash/ylds: 2Y 100-00 (2.498%), 5Y 100-13.5 (2.556%), 10Y

99-20 (2.668%), 30Y 107-02.5 (3.013%).