Tsys trading steady/mixed, long.....>

US TSYS SUMMARY: Tsys trading steady/mixed, long end outperforming, 10Y futures

unch at the moment on moderate to light volume (TYM>240k). Retail sales coming

up (+0.4% est) in addition to PPI ex. food and energy (0.2% est) at 0830ET --

neither likely to change market pricing in a .25 rate hike at next week Wed's

FOMC (long form meeting w/SEP, Fed chair presser). US$ index mildly higher/off

lows (DXY +.108, 89.772); equities firmer (emini +8.0, 2780.75); gold softer

(XAU -0.77, 1325.69); West Texas crude firmer (WTI +.52, 61.23).

- Asia, firmer open/carry-over bid from Tue saw levels rally moderately into

London crossover, curves continued to flatten (still off early Feb lows w/5s30s

at 46.010 at moment vs. 40.049 on 2/1). Modest trade included real$ buying long

end, flatteners in 2s and 5s vs. long end.

- London, firmer open pared back soon after, mildly hawkish message from ECB

pres Draghi cited as he notes Philipps curve is making a comeback. Two-way flow

in short to intermediates, cash buys belly

- Swaps, spds running mildly tighter, unwinding portion of Tue's widening. Flow

include early rush of receiving, two-way in short end.