Treasury Action: yields tapered lower
Treasury Action: yields tapered lower once again after popping from lows, led by the long-end. NAHB slipped a bit and the earlier selling cooled off after talk of curve trade unwinds (selling at short-end), Saudi multi-trancher hedging ($10-15 B deal), CPI all reportedly drove yields higher. Typically hedge-lock selling into the pricing of large corporate deals is followed by rate-lock unwinds upon the launch and pricing and, so far, that shoe fits. The 2-year yield is back down at 0.81% from highs over 0.83%; the 5-year slumped to 1.24% from over 1.28%; the 10-year stalled under 1.79% and reversed back to 1.75%; the 30-year topped 2.55% only to drop to 2.52% again. The front-end is continuing to outperform on the reversal lower in yields, while the long-end is lagging. The 2s-10s spread is inside +95 bp now, while the 5s-30s is near +127 bp.