Very quiet start to new week, Tsys.....>

US TSY FLOWS: Very quiet start to new week, Tsys trading mildly weaker all day,

drifting off late morning lows into the close w/yld curves paring back from

steeper levels. Light volume (TYH<875k) w/China out all week for Lunar New Year.

- Tsys extended session lows through the first half, matching moves in US$/Yen

as pair climbed to session high of 110.16. Tsys inched off lows from midday on

as US$/Yen slipped back below 109.85.

- US$ index held firmer (DXY +.265, 95.844); equities chopped higher into late

trade (SPX +13.25, 2717.5).

- Swap spds running tighter by the bell -- well off early wides. Early flow

included better receivers fading the move while midday flow includes payer in 2s

from 2.6775-2.6762%, receivers in 3s-4s, two-way in 5s w/better payers on net at

2.627%, small payer 7s at 2.6730%.

- On tap for Tuesday: Redbook retail sales m/m; Markit Services Index for

January; ISM Non-manufacturing Index (56.4 est); $38B 3Y note auction. Tsy

cash/ylds: 2Y 99-30 (2.530%), 5Y 99-26.75 (2.534%), 10Y 103-13.5 (2.720%), 30Y

106-06.5 (3.055%).