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

US TSYS/7Y: Nomura N.American head of rate research George Goncalves and

analysts Penglu Zhao and Stanley Sun said on 1pm ET $28B 7Y auction that "there

is a risk of a tail" at the auction. 

- But "with volatilities remaining tame amid all the recent risk events,

confidence for owning duration is still supported," they said. And "a relatively

quiet corporate issuance schedule into year-end should support duration takedown

on the belly." 

- However they warned also that "the market appears to have priced in almost

100% for a December hike, and the recent deluge of T-bill issuance has also

cheapened the funding rate." They added too that "the 7yr has been trading rich

on the curve."