BMO analysts Ian Lyngen and Aaron.......>

US TSYS/30Y: BMO analysts Ian Lyngen and Aaron Kohli expect a "well-received"

1pm ET US$12B 30Y bond reopening, "despite the tails this week" at 3Y, 10Y

auctions "as the bond looks locally cheaper versus 10s and 5s, and as seasonals

suggest that September bond auctions are well-sponsored events."

- They add the 30-year "liquidity" is "likely a bigger draw than for 10s and 5s,

and will help to aggregate any demand as investor flows into the long-end appear

to be fairly strong. The rich outright yield levels are an impediment, as are

the lack of spread to foreign bonds. Overall, we're fans of the long-bond over a

longer horizon but don't favor it in the near term."

- They "like flatteners over a longer horizon, and expect that any consolidation

over the next few months will only serve to offer a better entry point for

longer-term bond buyers. Volume stats have been lethargic recently for 10s and

3s, though that's admittedly a smaller risk for the bond due to the liquidity

the auction provides. The long-bond auction serves a greater liquidity purpose

for the long-bond than for 10s and the belly."