US 10-year yields
Treasury yields are 3 to 6 basis points lower today, despite the yen’s intervention. This is a good sign ahead of today’s refund update.
The initial projection for this quarter was $202 billion and the market reaction should be simple: anything higher will push yields up and anything lower will push them down.
Even if there is a failure, money will likely move into Treasuries, so I don’t see any particular risk further down the curve, although it will certainly impact the debt’s trajectory.
BMO suggests the numbers are unlikely to be lower:
We have no material bias in this regard, other than to observe that the strong underlying growth numbers for the first quarter – as evidenced by final sales to domestic buyers – bode well for tax revenue, which would reduce the need to significantly increase emissions in the short term.
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