Nomura's Goncalves said on Tsy.......>

US TSYS/SUPPLY: Nomura's Goncalves said on Tsy primary dealer q'ns that if

global central bks do "gradual normalization (following a sequence somewhat

similar to what the Fed has done, but with a lag), the return of term premium

should prove more structural than transitory (as the UST mkt benefited from

Global QE while the Fed entered a tightening stance). To the extent that term

premium starts to become more clearly priced-in, that wd clearly push up belly

to intermediate rates of the US curve."

- He adds "if term premium returns and sticks," Tsy cld look at a "barbell

approach where issuance could be slightly tilted twd the front-end and the very

long-end (eg in new maturity pt, counterbalancing front-end issuance in WAM

terms). We believe this wd be in accordance with the Tsy's plan" to focus on

upsizing Tbill program."

- "We do not recommend trying to mkt time the level of interest rates per se,"

he said. "At first we believe it's prudent to spread out the auctn sizes, by

starting with larger T-bills and front-end issues, but eventually all maturity

points down the line."