BMO's Aaron Kohli said on today's 1pm....>

US TSYS/5Y: BMO's Aaron Kohli said on today's 1pm ET $34B 5Y auction that

"foreign buyers had an exceptionally strong bid in August and took 22.8% of

total supply which suggests that demand is higher. Additionally, US/German 5

year spreads have been widening over the last 2-3 months. That's a manifestation

of the policy divergence between the Fed and ECB, but we expect it to eventually

tighten."

- He adds Tsy 5-year future spec positions "are at -6% which is not a record,

but are heading shorter after the Fed's recently hawkish tone. That should

provide the foundation for a squeeze at some point but we're not at levels that

will elicit that response just yet."

- He said ETF flows "are strongly positive in the past month as yields have

risen. The last thirty days have seen roughly $750 million into the larger ETFs

that we track, which is the largest inflow in almost a year. That should be

suggestive of further momentum and likely continued buying."