Treasury Action: longer dated yields remain depressed
Treasury Action: longer dated yields remain depressed, even as supply looms (both Treasury and corporate), and as equities are slightly higher. The Treasury kicks off the $78 B refunding Tuesday with the $34 B 3-year auction. The when issued rate is fractionally lower at 2.740% as a slightly bullish trend from overseas sovereigns has overshadowed. The wi 10-year is down 2 bps at 2.935%, with the wi 30-year down 0.5 bps to at 3.085%. As with many recent auctions, there's been little set up heading into the offerings, with auction results generally soggy. Upcoming Japanese income and consumption data might provide some early direction, with weak results possibly keeping JGB rates lower. A soft German production release could extend the slip in Treasury yields too. There's not much data Tuesday, with just JOLTS and consumer credit unlikely to provide fresh direction. As for the 3-year auction, the July sale was soft, even with a 2.685% award rate, the highest since 2008. The same could be true for the Tuesday Treasury sale. The July offering was awarded at 2.685% and saw a 2.51 cover (2.88% average) and a 39.6% indirect bid (51.3% average).