### POV: Traders report some foreign.....>

US TSYS/3Y: ### POV: Traders report some foreign accounts may be tempted to skip

today's 1pm ET $24B 3Y note auction, as they could make more money lending out

US dollars in the foreign exchange basis market. Here are the numbers; the

account could buy the WI 3-year note Treasury and get a 1.752% rate (based on

current 3Y WI); but it also could do US$ lending at a 1.9% rate, and thus in

theory obtain more yield.

- But it would seem the 3-year note auction today will not struggle too much:

it's not that much supply, and the new Fed Chair Powell is considered to be

relatively continuous in the Fed Chair Yellen mode. It was also expected that US

accounts would have good demand near current levels. "It's not that much supply:

it's not like a $34B 5Y note auction," summarized one trader.