Treasury Action: yields have reversed the earlier declines
Treasury Action: yields have reversed the earlier declines and are now fractionally higher on the day. With the likely end to the government shutdown at hand, traders are looking toward this week's supply. The $26 B 2-year sale Tuesday kicks off the $88 B in coupon auctions. Yields have ticked up as some concessions are being made. The wi 2-year is fractionally higher at 2.095%, with the wi 5-year at 2.465%, and the wi 7-year at 2.595%. Award rates at these levels would be the highest in years. How much demand will be seen is another story, as buying has generally been slowing, especially as risk appetite has risen. Expectations for increased supply and signs of rising inflation may limit demand going forward.