Traders projected moderate US demand....>

US TSYS/10Y: Traders projected moderate US demand at the 1pm ET US$20B 10Y

reopening auction, but potentially light foreign demand. They expected the

auction will get done between 2.380%-2.399% (vs. 2.379% WI bid now). "There will

be plenty of demand to cover it," said one trader. 

- A different trader agreed "this 10-year note will be okay." 

- Seaport Global Holdings' Tom Digaloma said the 3-year auction "comes and goes"

smoothly while the $20B 10yr reopening auction "is up next at 1pm" ET. He thinks

the "curve could steepen into the 10yr auction slightly, however the lack of new

issue credit supply should allow for the 10yr to be bought from moderately lower

prices levels." 

- BMO's Aaron Kohli expects the 10-year auction "to be fairly well received

especially if we can build a decent yield concession in the next few hours." 

- HISTORY: The Nov. $23B 10Y note auction (new) drew 2.314% yield, a 2.48

bid/cover, 68% indirects, 9.04% directs leaving only paltry 22.96% for dealers

to mop up.