BMO analyst Aaron Kohli said "this......>

US TSYS/10Y: BMO analyst Aaron Kohli said "this week's price action has eroded

any meaningful outright concession" for today's 1pm ET US$23B 10-year refunding

auction" so he's "more apprehensive than usual about the takedown."

- He maintains 10Y auction "should ultimately prove to be a buying opportunity"

and likes "coming out of this week's auctions long." But he adds "the tail vs.

stop-through call is more of a toss-up. If forced to choose, we would say a

modest tail with strong non-dealer participation. Although 10s have richened

recently with yields falling 16 bp from their late October highs and 4.5 bp from

the October auction stop, we believe the curve-wide flattening bias has further

to go."

- They add however "and this is a big caveat" that "recent 10-year auctions have

struggled with 5 of the last 6 auctions tailing. A quick glance at the technical

charts show a mkt coiling against the 200-day moving-average of 2.31% and given

the momentum profile and the performance of risk assets, we'd play for a break

lower."