### Traders are cautiously optimistic...>

US TSYS/10Y: ### Traders are cautiously optimistic on the 1pm ET US$23B 10Y note

auction; some expected US and Asian (China? Japan?) bid at the auction after

traders told MNI on Tuesday that foreign accounts might not come in so much at

3Y auction, as could make more money on US$ lending, given FX basis moves

recently. 

-- And indeed the 3Y auction only drew moderate/so-so demand, suggesting

lessened foreign bid could have been a factor; we won't know for sure until

later this month, when US Tsy publishes auction bidder breakdowns. 

- POV: But the 10-year note is a different animal, not so affected by FX

basis/yield moves. Tsys saw moderate Japanese selling in intermediates today,

but traders stress the puzzlingly tight price range (perhaps due to US tax

uncertainty on House, Senate tax plans?) Still, Japanese interest was expected

to surface in moderate fashion at the auction, with also Chinese bid too (don't

forget the optics here: US Pres. Trump is in China, just saying.)