Traders await 11:30 am ET Wed $13B...>

US TSYS/SUPPLY: Traders await 11:30 am ET Wed $13B 2Y FRN Reopening which they

expect to go at 3.8-bps discount margin, then they will ready for the 1pm $34B

5-year note auction. Traders hoped to get a price concession but market bid,

drawing buying. 

- 2Y FRN: Jefferies econ Tom Simons noted 2Y FRN reopening will raise $13B in

net new cash; it settles Friday Dec29, year-end. 

- HISTORY: $13B Nov. 2Y FRN reopening drew so-so bid: 0.035% (3.5 bps) high

margin rate, 3.69 cvr and  49.6% indirect bidders, 6.27% directs, 44.14% primary

dealers.

- 5Y NOTE: Jefferies' Simons said 5Y auction pays down $1B; auction settles Jan2

i.e. new year. Traders noted 5Y tight in RP, good shorts cd aid sale.

- Cantor Fitz Justin Lederer expects "buyers" as "we hover around the highest

ylds since 2011 (currently 2.24%, WI roll 1.5bps)"; wld "not be surprised by a

further small concession and/or small tail given the time of yr." 

- 5Y HISTORY: Good $34B Nov. 5Y sale: 2.066% rate, 65.8% indirects, 11.4%

directs, leaving only a small 22.8% for primary dealers.