Tsys see-sawed near session/week.......>

US TSY FLOWS: Tsys see-sawed near session/week highs into Fri's close, curves

steeper for most part (large 2s30s steepener block earlier) on modest volume

(TYH<950k). US$ index continued to add to wk's gains (+.122, 96.629 vs.

96.693H). Equities weaker/off lows (SPX -5.00, 2699.0).

- Very quiet data day: NY Fed GDP Nowcast, grain stocks data. Fed speak: SF Fed

pres Daly at an economic forecast conf in SF: financial conditions now tighter

than start of 2018; economy is self-reining; repeated comments made by Fed chair

Powell last week that shutdown drag will be made up Q2; a second shut-down "much

worse for confidence" as clock ticks down to Feb 15 gov shutdown threat of

border-wall financing.

- Heavy Tsy and Eurodollar option flow for otherwise quiet end to week: better

ATM vol sales in former vs. buying upside calls/call spds, latter seeing large

hedging of Q3 rate cut risk. No deal-tied flow to speak of, fast$ selling 3s-5s,

bank and real$ buying 10s and 30s.

- Tsy cash/ylds: 2Y 100-02.25 (2.461%), 5Y 100-08.75 (2.439%), 10Y 99-30

(2.630%), 30Y 100-15 (2.975%).