Treasuries hover just above day's.......>

US TSYS/30Y: Treasuries hover just above day's lows after early 10Y Tsy futures

sales, then pre-auction 30Y bond sales/shorts into 1pm ET $12B 30Y reopening,

after Mon soft 10Y reopening. Tsys saw indecisive curve action, with 2/10Y

fractionally flatter, 5/30Y 0.10 bps steeper.

- JPM analysts Jay Barry and Jason Hunter said 30Y reopening is "unchanged in

size from the previous reopening in October. The November auction cleared 0.1bp

through pre-auction levels, despite a decline in end-user demand to 68.2%. The

decline was driven by foreign participation, which fell to 7.2%, while

investment manager demand rose to 58.8%."

- They add since Oct. 30Y sale, "30-yr ylds have declined by approximately 3bp

and have now retraced 20bp from their local highs in late October. As we

discussed on Friday, though we project the curve to flatten significantly over

the course of 2018, the curve appears too flat after adjusting for its

fundamental drivers, and seems to have gotten ahead of itself. As a result, we

think it will require a concession from current levels to underwrite this

auction smoothly." The 30y bond reopening will raise all new cash.