*** Tsys trades mixed by the........>

US TSYS SUMMARY: *** Tsys trades mixed by the close, curve back to flattening

after trimming moves into midday, two-way positioning flow on net. Decent volume

belying relative quiet week opener. Limited data, focus more on Wed's IP (0.5%

est). Bill-auctions go off without a hitch.

- Equities reverse early gains, gapped lower on 2 large program sales, gold well

off lows (XAU -0.75, 1339.31), oil weaker (WTI -0.45, 63.85).

- Tsys trailed firmer Bund open on heavy early volume (TYH>500k by the open;

inter-dealer broker volume >130%), focus on Reuters ECB story ECB not planning

bond purchase plan changes until March.

- Bid for rates gradually evaporated from midmorning on, Tsy ylds climbed to

positive territory by midday as equities pared gains. Late second half rebound

in long end saw curves resume flattening (2s10s -2.018, 52.429

(54.361H/51.468L); 5s30s -2.018, 48.068 (50.699H/47.967L). Heavy front end

Eurodollar selling as rate hike in March gains momentum, ongoing heavy option

flow as well.

- Late ylds: 2Y 2.014%, 3Y 2.122%, 5Y 2.352%, 7Y 2.474%, 10Y 2.541%, 30Y 2.830%