BMO analysts noted this Tuesday....>

US TSYS/RESEARCH: BMO analysts noted this Tuesday "will kick off the cycle of

Treasury supply with the $26 bn 2-year, and after the sharp selloff last week,

we're a bit more comfortable with the notion that supply won't present a major

hiccup for markets."

- "In that vein, we expect the 2-year will be fairly well received and an early

morning concession would only help the event stats further," they said. "Though

the note doesn't offer the strongest relative value on the curve (versus 1s and

3s), the outright yield level, inflows into the sector, and the sizable

speculative short base are likely to be significant positives for the event."