Traders are reasonably optimistic.......>

US TSYS/10Y: Traders are reasonably optimistic about US and foreign demand at

the 1pm ET US$20B 10Y note reopening auction, after a fairly good 3Y auction

occurred. 

- Seaport Global Holdings' Tom Digaloma said the 3-year auction "comes and goes"

smoothly while the $20B 10yr reopening auction "is up next at 1pm" ET.

- He thinks the "curve could steepen into the 10yr auction slightly, however the

lack of new issue credit supply should allow for the 10yr to be bought from

moderately lower prices levels.

- BMO's Aaron Kohli expects the 10-year auction "to be fairly well received

especially if we can build a decent yield concession in the next few hours."

- HISTORY: The Nov. $23B 10Y note auction (new) drew 2.314% yield, a 2.48

bid/cover, 68% indirects, 9.04% directs leaving only paltry 22.96% for dealers

to mop up.