### Traders expect moderately good.......>

US TSYS/7Y: ### Traders expect moderately good demand from US and foreign

accounts at 1pm ET US$28B 7Y auction, which should draw a 2.138% to 2.141% rate.

"It will go okay," said one trader. 

- POV: There should be US and Asian (China, Japan) bid with some European

interest too. Foreign buyers bought 5Y auction Wed, so should be in today also

especially as 7Y auction should see demand tied to the month-end duration

extension needs. And foreign accounts like the 7Y maturity. Plus FOMC risk has

now passed, and 7Y is cheaper outright and on the curve. "This is a classic

7-year note thing: you buy into the month-end," said one trader. 

- But the auction could also have some challenges: distraction by the seven-part

AT&T debt deal (could be as large as $15B-$20B, rumored $55B order book). And

some may not want to buy into Friday's 2Q GDP report. 

- HISTORY: The June $28B 7Y auction drew a 2.056% rate, 2.46 bid/cover, and

65.4% indirects, 9.41% directs and 25.2% primary dealers.