Jefferies economist Tom Simons.......>

US TSYS/SUPPLY: Jefferies economist Tom Simons noted that the US Treasury also

announced "that they intend to keep coupon auction sizes steady throughout the

quarter, though they will likely be increasing the sizes of nominal coupons and

FRNs (TIPS notably omitted here). It is unusual that Treasury would provide

guidance on issuance for the following quarter, but it makes sense given the

timing of the debt ceiling reinstatement on Dec. 8th. It suggests to us that

were it not for the debt ceiling constraints, Treasury may have increased

auction sizes today."

- He adds the "debt limit continues to constrain Treasury's flexibility in

financing and they urge Congress to raise the debt ceiling as soon as possible.

Treasury continues to expect that they can fund the government through January

2018."

- He noted "there was no mention of the ultra-long issuance discussed in

previous quarters, though comments" by US Tsy Secy Mnuchin "earlier this week

suggest that development of the product has been shelved for now."