The Treasuries market calmed into 1pm...>

US TSYS/30Y: The Treasuries market calmed into 1pm ET US$12B 30Y bond reopening

auction, which occurs as traders feel sufficient price concession has been built

in. They believe the auction will get done at between 2.775% to 2.794%. "It will

be a good auction," said one trader.

- Traders earlier had been cautious into reopening but eyed US demand, moderate

Asian (Jpn, China potential bid) and maybe European demand (US 30Y WI at 2.784%

is bargain vs. Austria EUR 100-year bond at 2.11%.) 

- SMRA's John Canavan: 30Y auction raises all new cash. 

- Nomura's George Goncalves, Stanley Sun and Penglu Zhao: "persistent low vol

environment may continue to favor flatteners and help long-end takedown. An

extension on debt ceiling suspension may further dampen the likelihood of

Treasury's ultra-long bond issuance this year, which will be duration-friendly;"

but "long-end relative valuation on swap looks rich relative to positioning,

which may reduce some demand interest."  

- HISTORY: Good Aug. 30Y auction: 2.818% rate, 2.750% coupon, 2.32 cover; solid

66.8% indirects, 5.4% directs, so small 27.82% for primary dealers.