Treasury Action: coupon supply commences Tuesday
Treasury Action: coupon supply commences Tuesday as the $26 B 2-year coupon sale kicks off the $88 B in shorter dated maturities. Also on tap is the $34 B 5-year sale Wednesday, along wth the $13 B 2-year FRN reopening, with the $28 B 7-year offered Thursday. WI yields have fallen between 2 to 3.5 bps across the curve today, largely on further North Korea tensions and after the slide in EGB rates on the German election outcome. This could make for difficult auctions, especially for the 2-year where the wi has dropped to 1.440%. A stop there would be the highest going back to late 2008. However that may not bring in strong demand given the FOMC is on track to further normalize policy. There should be decent demand from overseas accounts, though, especially for the 5s and 7s, given the still wide spreads to many sovereigns, and especially as many still trade in negative territory.