Treasury has a challenging...........>

US TSYS/SUPPLY: Treasury has a challenging double-barrel auction supply schedule

today; 11:30am ET US$24B 3Y auction and then 1pm ET $20B 10Y reopening. Traders

are cautiously optimistic with potential Japan, Chinese bid tho Jpn traders

would prefer 2.40% zone 10Y vs. 2.337% current WI 10Y. 

- 3Y AUCTION: Buyers may be nervous to buy ahead of a Dec. rate hike, but that's

a ways off; still, auction occurs ahead of today's 2pm ET FOMC meeting minutes.

But may be some willing to take a shot. 3Y note is very tight in O/N RP,

suggesting some good shorts in issue already. 

- HISTORY: Sept. US$24B 3Y auction drew a 1.433% yiled, 2.70 bid/cover, 10.4%

direct bid, a 46.2% indirect bid and high 43.4% dealers. 

- 10Y REOPENING: Traders want more price concession esp. given the 3/10Y auction

combo Wed, so demand details will remain to be seen; but Jpn bid should surface

as buying resumes after recent inaction/sales into qtr-end/Jpn half-year end.

China markets back in action shd aid bid. 

- HISTORY: Sep $20B 10Y reopening: 2.180% yield, 2.28 cover, 55.3% indirects,

3.1% directs, 38.7% dealers.