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Traders' expectations sweeten up a bit...>

US TSYS/2Y
US TSYS/2Y: Traders' expectations sweeten up a bit heading into the 1pm ET
US$26B 2Y note auction, amid price concession due to worries in case the next
Fed Chair is potentially hawkish. The auction should draw US and a foreign bid,
but traders differ on the amount of foreign buying to expect after a tepid 6%
foreign portion in Sept. 2Y auction. Some believe though that foreign buying has
rebounded a bit since such Sept. 2Y auction. 
- "It will be okay," said one trader. "We have a concession. The long end is
underperforming." 
- A different trader said 2Y note was pressured by "the hype about the next Fed
chair, as they have been bringing down the market pretty hard in the front end."
- HISTORY: The Sept. 26B 2Y note auction drew a 1.462% rate, 1.375% coupon,
2.88% bid/cover; and 44.15% indirects, 19.04% directs and 36.81% primary
dealers.

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