### POV: Some caution is advised into...>

US TSYS/30Y: ### POV: Some caution is advised into 1pm ET Thurs 30Y bond auction

after a so-so Wed $23B 10Y auction followed stellar Tuesday $24B 3Y auction.

Some feel price concession is needed today, but moderate demand could surface at

30Y sale as they anticipated US accounts, and Japanese and Chinese buying. The

10Y auction Wed suffered as it came at pricey levels, after market had a

Tues/Wed safe-haven bid rally on N.Korea worries. (Tsys did ebb off today's

highs amid pre-auction shorts, profit-taking.)

- But Japanese accts still feel US economy will bump along near-term so Fed may

be on hold, so they still could buy. Japanese accts did good buying in Tsys in

most recent week as Japanese MOF data showed net buyers of foreign bonds of

Y106.70 (US$9.6B). 

- Chinese bid is expected as China FX reserves and Treasuries holdings grow,

said traders; "they tend to buy the whole curve" in Tsys, taking some of each

maturity. Others expect Europe bid as Tsys cheap cross-mkt vs Europe. 

- SMRA's John Canavan: auction will "raise $10.177 Bln after accounting for the

$4.823 Bln maturing bond."