Treasury Action: supply will be hefty in the abbreviated week ahead
Treasury Action: supply will be hefty in the abbreviated week ahead, totaling $189 B in bills, notes, and bonds. While the sheer weight may be difficult to absorb, the big jump in yields today could make the offerings a little more palatable. The auctions include $56 B in coupons with $24 B in 3-year notes and the $20 B in reopened 10s to be sold on Wednesday, with the $12 B in reopened 30-year bonds due Thursday. The debt managers will conduct the $133 B in bill auctions on Tuesday, including $78 B in 3- and 6-month bills, a $35 B 4-week bills, and a $20 B 52-week bills. The condensing of the auctions could be to their detriment, especially the notes, as the doubling up on offerings typically hasn't been successful. The increase in Fed tightening expectations, as well as the prospects for accelerating inflation may limit demand too. But, with the wi 3-year yield at 1.67% currently, the wi 10-year at 2.370%, and the wi 30-year at 2.905%, there may be some decent bidding. A stop there on the 3-year would be 24 bps cheaper than the September award, and would be the highest since April 2010.