The overnight repo market....>

US TSYS/OVERNIGHT REPO: The overnight repo market saw demand in the Treasury

2-year, 5-year, 7-year and 10-year notes Monday. The 3-year notes cooled off

amid the 3/10/30-year auction settlement Friday. But the 10-year notes --

despite the influx of new 10-year note reopening supply -- still had demand.

- The Treasury 2-year note, 5-year note, and 7-year note started to see demand

heading into the late month 2/5/7-year note auctions. Bills meanwhile traded

quietly around 1.05% (1m, 3m) to 1.10% (6m, 1-yr) bills.

- The Treasury General Collateral level traded at 1.15% while Agency MBS

collateral traded at 1.20%. It was expected that Agency MBS might get a bit

cheaper around Wednesday's FOMC meeting, which could see the announcement of

tapering/Fed balance sheet reduction, which could affect MBS negatively slightly

more than Treasuries, said some traders. (More)