*** Spd curve shifts off flatter levels....>

US SWAPS: *** Spd curve shifts off flatter levels to steeper post data, short

end recedes while intermediates to long end move wider. "It's a small signal

Treasury is not going to ramp auctions quickly but has the flexibility to offer

a more market friendly transition than some have recommended/forecasted," FTN

Financial's Jim Vogel said. Sources report modest rate paying out the curve

after macro acct paying in the intermediates, 10s and 30s overnight. Latest

spread levels:

* 2Y +0.63/24.62

* 5Y +0.38/7.69

* 10Y +0.51/-3.92

* 30Y +0.85/-33.40

Tuesday recap: Spds hold mixed lvls by the bell after narrowing in early trade,

light swap flow included sporadic rate paying tied to hedge acct story losing

ground to incoming supply (KFW and ADB) today. Sources noted receiving in the

intermediates by leveraged$ earlier in addition to two-way flow from specs

positioning differing opinions over possible increased auction sizes.