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Despite the prospect of a potential......>

US TSYS/2Y
US TSYS/2Y: Despite the prospect of a potential December rate hike, traders said
today's 1pm ET $26B 2-year note auction should draw a reasonable bid. While it's
calm for this moment, traders are still wary, eyeing the
geopolitical/N.Korea-tied jitters. 
- Treasury has a busy supply schedule this week: 2-year auction Tues, then
11:30am ET $13B 2-year FRN reopening Wed and 1pm ET $34B 5Y note auction, then
finally $28B 7Y auction Thurs. 
- Traders pointed out the 2Y WI at 1.449% is around the cheapest levels since
2008, thus has built in some concession for that rate hike reason. Meanwhile Fed
Chr Yellen will speak at 12:45pm ET, thus mkt will be watching that too. Also
the overnight repo market shows 2Y notes very tight, suggesting a good short
base already.

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