*** Traders will be interested to....>

US TSYS/SUPPLY: *** Traders will be interested to see the U.S. and foreign

demand at at next Wednesday's 11:30 a.m. ET $24 billion 3-year note auction and

the $20 billion 10-year note reopening also that day, which follows a Monday

Columbus Day holiday and a bill-dominated auction schedule Tuesday. Thursday

then brings a $12 billion 30-year bond reopening auction at the usual 1pm time.

- "In light of the recent backup in yields, our outlook for the auction process

is constructive and we would come out of the event long in Treasuries,

especially if any supply concession entails a breach of the 2.40% yield-level in

10-year notes," said BMO's Ian Lyngen. "That is a departure from our typical

assumption that a compressed auction schedule will limit the set-up, and make

underwriting the Treasury Department's issuance more dubious."

- Meanwhile Japanese or Asian buyers of Treasuries may want to see if the market

can stabilize next week before they would buy, said some observers. Some

Japanese accounts like to buy around the 2.40% 10-year note, and did buy as the

yield briefly hit 2.402% at 10:04 a.m. ET Friday, before backing off, said

traders. The yield is at 2.364% currently.