Treasury Action: supply heats up this week
Treasury Action: supply heats up this week which could keep yields biased higher. Treasury is auctioning $64 B in coupons. The size of the package was increased by $2 B versus March's $62 B, thanks to the boost in the 3-year note. The debt managers will sell $30 B in 3-year notes (Tuesday), $21 B in reopened 10-year notes (Wednesday), and $13 B in reopened 30-year bonds (Thursday). They will also sell $90 B in 3- and 6-month bills today. When issued (wi) yields have edged higher after Friday's short covering rally. The wi 3-year rate is up 2 bps to 2.430%. The wi 10-year is 2.5 bps higher at 2.810%, with the wi bond up 1.5 bps at 3.040%. While the rates are some of the cheapest in years, demand has been waning in general, as was seen in the late March offering of 2-, 5-, and 7-year notes. There will be some worries that China could be cutting back on buying Treasuries due to the trade skirmish, but analysts don't believe that will be a big factor -- it will be nearly impossible to gauge that in real time anyway.