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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 Penglu Zhao and Stanley Sun said on today's 1pm ET $26B 2Y note auction
that they are "slightly bearish" on the demand outlook. 
- They said 2Y auction advantages are that "front-end carry/rolls are still
attractive" and "valuations are certainly in the cheap range after the recent
sell-off both outright and on the curve."
- But they warn also that "foreign appetite for front-end has subsided.
Attractive dollar lending in FX basis trade may divert some flows from front-end
cash bond buying." And also, "upcoming T-bill issuance may also present
headwinds for the takedown," they added. 
- The WI 2Y note is at 1.598% rate currently.

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