The holiday-shortened US week today means a compacted US Treasury auction calendar. First, there are $69 billion in US sales over 2 years at the unusual time of 11:30 a.m. ET. Next comes $70 billion from 5 to the usual time of 1 p.m. ET.
This represents a monstrous amount of supply hitting the front and midpoint of the curve in one day. With consumer confidence above expectations and supply, the early decline in yields has largely reversed. Currently, the 2s are down 2.4 basis points at 4.93% and the 5s are flat at 4.53%.
We could see a slight recovery at the start of the period if we manage to emerge unscathed.
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