Treasury 3-year auction preview:
Treasury 3-year auction preview: yields have jumped in tandem with the climb in oil prices, and that's helped build more of a concession into the upcoming offering. The wi has risen to 1.535%, versus an earlier low of 1.525%. That should be supportive at the margin, but light, summer trading may limit demand in general. A stop here would be a little richer than the 1.573% from the July offering, but is about mid-range of recent sales. The note is semi-attractive on the curve too, trading at the narrow ends of the 3s-10s and 3s-5s spreads, at 75.7 basis points and 30.8 basis points, respectively. And it's little changed on the 2s3s5s butterfly at 42.3 basis points. There is the potential for a bid on debt limit uncertainties and the worry that some auctions could be been_delayed , but that's more likely to show up in the September offerings. The indirect bid should be decent given many shorter dated sovereigns overseas trade with negative yields. On the other hand, the note is not trading tight in repo, though shorts increased slightly in the JPMorgan "all client" Treasury survey. The July auction was average, stopping at 1.573% and garnering a 2.87 cover (2.81 average) and a 52.6% indirect bid (52.6% average). Direct bidders took 9.9%, with primary dealers taking 37.6%.