Treasury 30-year bond outlook: demand could be soft
Treasury 30-year bond outlook: demand could be soft for the $12 B reopening given the poor results in the first two offerings given their rich pricing levels. The when issued is trading at 2.775%, having risen from 2.70% on Monday. Nevertheless, a stop here would be the lowest since October. And though PPI came in slightly below expectations, annual rates accelerated and ahead of CPI tomorrow. And, forecasts are for energy prices to remain firm through the fall thanks to the hurricanes. Those factors could leave buyers sidelined. On the other hand, there was a strong reception to the German Bund offering overnight. And the 2.75% coupon is still attractive, especially compared to the 1.20% rate on the German 30-year. The $15 B August bond sale saw above average demand. It was awarded at 2.818% and garnered a decent 2.32 cover (2.28 average) and a 66.8% indirect bid (62.6% average).