Traders have some caution into the......>

US TSYS/30Y: Traders have some caution into the 1pm ET US$12B 30Y reopening

auction, but feel with enough price and curve concession, moderate US demand

should show up and perhaps a light foreign bid. Traders expected a 2.795% to

2.810% auction rate. 

- Nomura N.American head of rate research George Goncalves said 30Y sale could

"demand some concession for a change, and lead to more micro- steepening in the

long end. Such curve moves would impact spreads into year-end, given spread

market directionality." 

- BMO analyst Aaron Kohli expects a "fair reception" for 30Y auction as "rich

levels collide with low liquidity." But "buyers could step up even at rich

levels, as liquidity is light in the market now, and only likely to worsen into

year-end," he added. 

- HISTORY: The $15B Nov. 30Y auction drew a 2.801% high yield, a 2.23%

bid/cover, a 2.75% coupon and 61.8% indirects, 6.42% directs leaving a 31.7% for

primary dealers to mop up.