Rates traded weaker all day but........>

US TSY FLOWS: Rates traded weaker all day but see-sawed to top end of session

range by the bell. Little react to weaker than expected data (Jan core PCE price

index +0.1% vs flat BBG expected, +0.2% MNI; MNI Chicago Business Barometer

Retreats in March to 58.7 vs. 61.0 est). Tsys continued to track moves in Bunds

while ignoring moderate strength in equities. US$ index firmer (DXY +.043,

97.245); equities near late highs (SPX +14.0, 2835.0).

- Front end came under pressure on midday comment from Fed'S Quarles: "FURTHER

RATE HIKES NEEDED AT SOME POINT"; while ignoring left field comment from WH

economic advisor Larry Kudlow on CNBC that the Fed should cut rates immediately

by 50bp.

- Late session month end sell imbalances, appr -260k TYM sold in minutes ahead

the bell, futures rebounding soon after. Less option flows than earlier in week.

Note, 3M10Y yld curve dis-inverted +3.990 to +1.215 after the bell (+2.886H)

after extending 12 year lows early Thu of -11.7.

- The 2-Yr yield is up 3.4bps at 2.2701%, 5-Yr is up 2bps at 2.2346%, 10-Yr is

up 1bps at 2.405%, and 30-Yr is down 1bps at 2.8127%.