A US trader talking about the bill....>

US TSYS/BILLS: A US trader talking about the bill market makes the point that

yesterday's $20bln 1 month bill auction for the 5 Oct tailed 3bp. This is one of

three bill dates labelled as sitting in the 'drop dead' zone.

- The early October dates have attracted more attention as the hurricane in the

South has created an expectation of greater Treasury cash outflows and smaller

inflows from tax.

- The trader mentioned that the true drop dead date will become clearer after

the corporate tax receipts next week.

- The trader warned not to fight any move with logic based upon what's priced in

terms of default. The bill market in these circumstances is flow- and not

statistically driven. And, small flows have a huge impact.