Rates trading mixed, near middle.......>

US TSY FLOWS: Rates trading mixed, near middle relatively narrow range on modest

volume (TYH<820k), yld curves continue to pare early wk steepening after

reversing course early Wed. US$/Yen weaker but off lows (-.11, 108.98), US$/GBP

extending wk's high (+.0093, 1.2977). 

- General quiet w/US Gov in 27th day of shutdown; headline watching, corporate

earnings rollout; Fed enters next media blackout midnight Fri through Jan 31.

- Post-holiday malaise exacerbated by shutdown and lack of consistent data

keeping many on the sidelines, even Canada feeling the effects: Statistics

Canada said Thu it is delaying the release of the international merchandise

trade until the U.S. Census Bureau resumes its "normal operations."

- Light flow included two-way in shorts to intermediates, fast$ unwinding early

buys in 2s, deal-tied selling, two-way option -tied hedges as well. Early

swap-tied selling 2s-10s. Solid 10Y TIPS auction awarded high yld of 0.919%,

indirects took 69.07 of competitives.

- Tsy cash/ylds: 2Y 99-28.62 (2.551%), 5Y 100-10.5 (2.552%), 10Y 103-12.5

(2.727%), 30Y 106-06 (3.056%).