Tsys trading mildly higher for the.....>

US TSY FLOWS: Tsys trading mildly higher for the most part, yld curves flatter

w/front end underperforming. Moderate volume heading into the open (TYH<325k).

Equities steady/near mid-range (SPX 2731.0); US$ index see-sawing off top end of

range (DXY +0.090, 96.157 vs. 96.235H).

- Tsy curves see-sawing around steady, overnight flow included flatteners in 3s

and 5s vs. 10s, prop and real$ buying out the curve, pre-auction short sets.

Expecting to see pick-up in March-June Tsy futures rolling as Feb 28 first

notice date nears.

- On tap for Wed: Non-farm productivity (p) (1.5% est) and unit labor costs (p)

(1.8% est) for Q4; trade balance for November (-$54.7B est); $27B 10Y note

auction.

- Tsy cash/ylds: 2Y 99-30.88 (2.516%), 5Y 100-08 (2.583%), 10Y 103-23 (2.686%),

30Y 106-29 (3.021%).