Traders feel there should be moderate....>

US TSYS/3Y: Traders feel there should be moderate US and foreign (China, Jpn,

Europe) demand for today's 11:30am ET $24B 3Y auction; traders projected it will

draw a 1.662% to 1.666% rate. "It will go fine," said one trader at a primary

dealer. "We'll get a sense" of the market demand since Tsys have "bounced off

Friday's price lows pretty well," he added. - A different trader noted that the

price concession "is in" and both 10Ys and 3Ys are "much cheaper than the

September auctions. Also 3-year notes are very tight in repo" amid presumably

good shorts, he added. 

- One other trader said the 3Y auction "will go okay" but "not a lot of people

really like it." He added that "if you want to buy the front end, you may want

to buy 2Ys instead of the 3Ys. The 3-year notes had been as cheap as 1.70% in

the spring 2017" vs. WI 1.66% today, he said. 

- "They seem fairly okay butterflied against the 2/3/5Y, but a bit rich," he

added. "There is enough price concession on the day."