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Traders are cautiously optimistic on.....>

US TSYS/3Y
US TSYS/3Y: Traders are cautiously optimistic on demand at 1pm ET US$24B 3Y
auction amid nomination of status quo Fed Chr Powell, relatively small auction
size, and some safe-haven bid amid Mideast/ N.Korea on/off jitters. So US buyers
were expected to show up at wjith also some foreign/Asian buyers (though some
other foreign/Asian accounts may be tempted to do US dollar FX basis lending
instead.) 
- "It will be fine," said one trader. "It is not a big issue. It will come plus
or minus 0.3% of a bp from where it is at the auction time." 
- Nomura analysts cited Powell and "attractive" vol adjusted carry/roll on front
end as 3Y pros, but "wide" FX Basis and "slowing" foreign central bank buying in
Tsy could hurt bid. 
- JPM analysts expected 3Y to go "without a problem" and noted Oct foreign
demand rose 5.8%-pts m/m in Oct to 20.6% from "weak" 14.8% Sept. 
- HISTORY: Oct $24B 3Y auction drew a 1.657% yield, and 54.3% indirects, 7.1%
directs and 38.6% primary dealers; 2.83 Bid/cvr (2.7 Sep, 3.13 Aug)

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