Traders feel the 2Y note should be...>

US TSYS/SUPPLY: Traders feel the 2Y note should be getting cheap enough to draw

moderately good US and foreign demand at the 11:30am ET U.S. Treasury $26

billion 2-year note auction. Traders also cited overnight sales in 2Y, 5Y notes

as perhaps a preparation to buy today's 2Y, 5Y auctions. Also the 2-year note

and 5-year notes are tight in overnight repo trading, suggestion already good

shorts. Tsy also will sell 1pm ET $34B 5Y note auction today. Traders expected

potential Asian demand too. 

- "The 2-year note auction will go fine," said one trader. "It is not enough

duration to matter. I think the same of the 5-year notes." 

- Some others noted that auctions could find it a bit tougher due to thinned

vacation liquidity and the UK bank holiday. "We have the 2s auction and 5s

auction both in the one day," said one trader, who expected US and foreign

demand.

- 2-YR HISTORY: The July 2017 2Y Auction drew 58.5% indirects, 17% directs and

24.64% dealers, and a 1.395% high yield and 3.06 bid/cover.