/3Y: Treasuries saw FX-tied..........>

US TSYS/SUPPLY: /3Y: Treasuries saw FX-tied selling by black boxes as the US$

firms up vs. yen; earlier saw black box buying amid weaker US$. Tsys saw

pre-auction short-setting into 11:30am ET 3Y auction and 1pm 10Y reopening and

rate-locks amid busy high-grade US$ corporate bond issuance.

- 3Y AUCTION: Buyers may be nervous to buy ahead of a Dec. rate hike but that's

a ways off and may be already priced in; auction occurs ahead of 2pm ET FOMC

meeting minutes. But may be some willing to take a shot, including US, Jpn,

China, Europeans. 3Y very tight in RP, suggesting some good shorts.

- SocGen's Shakeeb Hulikatti said 3y, 10Y "take place" before 2pm ET FOMC mins;

3y needs "concession" as doesn't "seem to have set up from a RV perspective." He

cited "cut in dealers'" 3Y shorts plus fact auctions occur before Friday CPI, a

"risk event.

- JPM's Jay Barry, Jason Hunter: Since Sep auctns, 3Y and 10Y yields rose "20bp

and 16bp, respectively, and are trading near their highest levels in 6 months."

- HISTORY: Sept. US$24B 3Y auction: 1.433% yield, 2.70 cover, 10.4% directs,

46.2% indirects,  high 43.4% dealers.