Jefferies economist Tom Simons said...>

US TSYS/BILLS: Jefferies economist Tom Simons said today's 4-week bill auction

"stopped at 94 bps, 1 basis point above the 11:30AM WI bidside. The market

rallied" on Monday "in response to the $5 bln reduction in the size of the

auction announced yesterday. The rally seems to have priced out a lot of

investors, evidenced by a weak Indirect takedown."

- He added that "the 3.06 bid/cover is well above the recent average, but it is

relatively low considering the $30 bln size of the auction. This is the smallest

4-week bill auction since March 7th." He noted also that "indirects remain

relatively inactive in the auctions, with a 20.2% takedown. Directs took down

5.3%, which is their smallest takedown since June 20th. Dealers took down 74.5%

of the auction, which is above average."