FTN's Jim Vogel said on today's..........>

US TSYS/3Y: FTN's Jim Vogel said on today's just-completed US$24B 3Y auction

that "indirect bidders took only 54.3%" of the auction, which was "awarded at

1.657% vs the WI bid of 1.660% at the deadline and the 20 mins prior to the

final bid. This wasn't a bad auction, it just wasn't a smart way to start a

two-a-day Treasury sale. Dealers own 38.6% versus a more typical 30ish percent.

Award at the high yld was a messy 65%."

- He adds the "bid/cover of 2.83x fell short of the 3x mark that denotes a clean

3-yr that doesn't trouble the short end. 3s were held low today by frightening

reverse repo costs to borrow the Sept 2019 maturity." 

- He adds that "with the dollar under pressure (yes, again) and US stocks on the

sidelines, the Treasury tone has begrudgingly improved on moderate volume this

morning. Rate changes have been in the opposite direction of Oct month-to-date,

with the short end weaker and the long end stronger. Also, the flatter curve

reflects a flatter outlook for inflation expectations in first two days of this

week. TIPS traders are getting more bullish on the upside surprise potential of

Sept's CPI report at the end of this week."