BMO analysts said they were "not.......>

US TSYS/TIPS: BMO analysts said they were "not fans of the 10-year TIPS on a

breakeven or real yield basis, but saw the inflows into the sector as the

largest potential positive for the auction" ahead of time. But the $11B 10Y TIPS

auction reopening's "2.3-bp tail was disappointing, but not unexpected given the

lack of value that the note represents and after the hawkish Fed yesterday,"

they said.

- They add that TIPS breakevens "are lower on the results and real yields are

rising along with nominals. Stats were slightly soft for a reopening with direct

buyers missing and dealers taking down the supply after building in a discount.

For TIPS, this wasn't a terrible result and as the July 10-year refunding

reminds us (6 bp tail), this could have been much worse."