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Nomura N.American head of rate...........>

US TSYS/2Y
US TSYS/2Y: Nomura N.American head of rate research George Goncalves and
analysts Stanley Sun and Penglu Zhao are cautious on today's 1pm ET 2Y note
auction. It has following pros: the "re-emergence of geopolitical uncertainties
could drive some flight-to-safety bids to the front end. Front-end valuation
cheapened after last week's FOMC; hence it could potentially draw-in investors,"
they said.
- But it also faces the following challenges:  that "foreign central banks' US
Treasuries holdings surpassed the 2015 high. It is unclear how much further room
there is for foreign central bank buying."

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