BMO's Kohli said on 5Y auction that......>

US TSYS/5Y: BMO's Kohli said on 5Y auction that "seasonals imply a slight bias

to stop thru with eight of the last thirteen September 5-year auctions coming

through 1pm levels. Stats show a propensity to stop through with an average of

0.6bp over the last six auctions. Seasonals for all USTs are positive for the

next few weeks but then turn more bearish in mid-October. Primary dealer

positions are lighter than they have been in some time, but are still elevated

historically." 

- Kohli added "Trump trade is back in vogue for the moment and while we

certainly acknowledge the pressure in USTs as a result, we're less optimistic

that anything substantive will make it through the legislative process."   

- He adds that "while still short overall, leveraged funds gained some long

ground in September leaving less room for short covering. Treasury index

extension of 0.07 years is fairly average. And Fed buying will be roughly $4.2

billion in the 5-year but that's not exceptional for the note. Repo does

indicate a slight bid for 5s at 51 bp versus GC at well over 1%, so a slight

bid, but no indications of a runaway short base."