*** Tsys trading mixed in late......>

US TSYS SUMMARY: *** Tsys trading mixed in late session, curve back to

flattening after trimming moves into midday, turning out to be two-way

positioning flow on net. US markets returning from extended holiday weekend

w/decent volume belying a 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 extend sell off late (emini -9.25, 2779.50), gold

weaker/off lows (XAU -1.26, 1338.80), oil weaker (WTI -0.63, 63.67).

- 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 climbing 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.