*** US rates have been rotating.....>

US TSYS SUMMARY: *** US rates have been rotating around mixed levels on narrow

range for much of the session, long end gained late on decent moderate

(TYH>1.1m) well off last wk's frantic pace. No significant data on day, while

Clev Fed Mester made hawkish comments at event in Ohio. For the most part,

acct's opted to ply the sidelines ahead Wed's CPI release (0.3% est).

- US$ index slipped .471, 89.737; equities recovered early losses/traded higher

late (emini +5.0, 2660.25); gold firmer (XAU +5.91, 1328.67); oil softer (WTI

-0.13, 59.16).

- Tsys traded firmer near top end of range by the open on modest volume even

w/Japan back from holiday. Tsys gained midway through Asia hours trade just as

US$ vs. Yen tumbled from 108.7 to 107.6 (Nov'16 lows) w/equities following suit.

- Flow two-way on net, positioning ahead CPI, curve flatteners in 2s and 5s vs.

long end; swap spds ground tighter on more mixed flow. Overnight repo, 5s join

2s at fail (-1.02% and 1.64% respectively) while 10s inched off fail. Heavy

option volume, long puts unwound

- Late ylds: 2Y 2.102%, 3Y 2.307%, 5Y 2.543%, 7Y 2.743%, 10Y 2.833%, 30Y 3.119%