Traders hold mixed views on 1pm ET.....>

US TSYS/TIPS: Traders hold mixed views on 1pm ET US$12B 10Y TIPS reopening, but

some noted that it could draw good demand while others cautious. Traders expect

TIPS sale will draw 0.410% to 0.420% yld. "I think we will see good demand,"

said a trader. "It could come through. Demand for TIPS has been strong. I don't

think anything the Fed did or said Wed really changes that. Crude oil is

gaining."

- He added "downside" CPI risk after several weak CPIs "ameliorated" by recent

Aug CPI." He added cheapness wld "bring the auction at even a more palatable

yield," both outright and on breakevens." 

- SMRA's John Canavan: reopening "raises all new cash;" light month-end bid. 

- BMO's Aaron Kohli: Auction "not strong value proposition given the runup in

breakevens;" but sector flows strong "with about $2.2B in (TIPS) funds we track

in August, which should provide some lift for the demand at the auction." He

added "inflation is bouncing somewhat and oil has stabilized above $50." 

- HISTORY:July $13B 10Y TIPS sale: 0.375% cpn, 1.98 cover, 0.489% high yld;

52.5% indirect, 8.05% directs, 39.5% dealers.