Treasury Action: yields have been mostly flat to lower all session
Treasury Action: yields have been mostly flat to lower all session despite upcoming supply and small gains in equities. The lack of set-up for the auction may limit demand, which has already been waning for months. The Treasury is selling $56 B in 3-, 10-, and 30-year maturities, beginning with the shorter note on Tuesday. The wi 3-year is 1 bp lower at 2.075%, with the wi 10-year unchanged at 2.485%, while the bond is 1 bp higher at 2.820%. Award rates here would be the highest since May 2007 for the 3-year, March for the 10-year, and October for the long bond. Higher rates may not attract much buying this week, especially as the Treasury is expected to increase issuance volumes starting next month. Domestic funds and foreign private investors have been trimming demand for several months and the weaker dollar may not help the latter. Foreign official demand should remain solid, however, given still wide spreads (204 bps to the German 10-year and 154 bps to the 30-year tranches).