SMRA's John Canavan eyed the 1pm ET....>

US TSYS/TIPS: SMRA's John Canavan eyed the 1pm ET $5.0B "$5.0 billion reopening

of the 7/8% of 2/15/47 30-year TIPS issue" and said it "will raise all new cash

when it settles on Monday, Oct. 31st."

- He adds that the "Fed holds approximately $5.280 billion of the 5-year note

issue maturing on Oct. 31st and approximately $3.421 billion of the 7-year note

maturing on June 30th. However, beginning this month, the Fed will roll over

only the portion of maturing issues that exceeds $6 billion."

- "That cap will be raised to $12B for the first quarter of next year, $18B for

the second quarter, $24B for the third quarter, and $30B for the fourth

quarter," he said. "That means that of the combined $8.701B billion maturing on

the 31st, the Fed will roll over only approximately $2.701B into the issues

maturing on the 31st, which will include next week's 2-year FRN, and 2-year,

5-year, and 7-year note auctions."