Treasury 30-year auction preview:
Treasury 30-year auction preview: the wi bond has cheapened 5 bps to 3.050%. But that may not make for strong results given the more bearish tone in the Treasury market. So far this week the 3- and 10-year sales have been on the soft side. Also, in spite of the rise in yields today, the current level is still richer than the March and February auctions, and is especially unattractive if rates are expected to be moving higher on inflation pressures, Fed rate hikes, and increased debt issuance. Also, analysts don't see an urgency to be a buyer at this point as auction sizes should be on the increase most every quarter. And, the bond isn't tight in repo, suggesting a limited short base, although there are natural buyers for the offering. On the positive side, current uncertainties over Syria and trade could underpin some demand. Indirect bidding should remain healthy, however, thanks to wide spreads (186 bp premium to the German sovereign) and demand for yield. The March reopening was decent, stopping at 3.109% with a 2.38 cover (2.35 average) and a 57.9% indirect bid (62.6% average). Direct bidders accepted 14.8% last month, while primary dealers took 27.3%.