/2Y: Traders eyed a heavy slate of...>

US TSYS/SUPPLY: /2Y: Traders eyed a heavy slate of Tsy coupon auction supply

next week: 2Y, 5Y, 7Y notes and 2Y FRN reopening. "We'll see what happens next

week with supply," said one trader. "It may be a bit harder than normal. We may

have to back it up a bit" in yield "to get it done," he added, alluding to a

need for a pre-auction concession to cheapen up the issues. However most will

not sell the market yet until they get through the long Christmas weekend

holiday.

- The BBG/Barclays Tsys month-end duration index extension was estimated at 0.07

years while agencies index extends 0.12 yrs; the Tsys index extension could

potentially help the 5-year or 7-year note demand. 

- Traders said it's hard to say how much Japanese demand there would be. "They

have been pretty light" in Tsys action this week," said one observer.