Treasury Action: supply is heavy this week and with a $78 B 3-pronged package
Treasury Action: supply is heavy this week and with a $78 B 3-pronged package of offerings. These include a $38 B new 3-year sale for Tuesday, up $1 B from November; a $24 B 10-year reopening for Wednesday, versus $27 B November new issue; and a $16 B 30-year bond reopening on Thursday, from $19 B new issue. There's also a $75 B 3- and 6-month sale for today, unchanged for a third week. It could be a real tug-o-war for the coupon offerings given the richening in rates lately, and ahead of a likely rate hike on December 19, while worries over yield inversion and year-end flows complicate the picture. When issued yields are mixed with the 3-year rate 1.5 bps higher at 2.73%, the 10 up 1 bp at 2.86%, while the bond is 1 bp lower at 3.14%. Stops here would be significantly richer than levels over the last several months. Yet, that may not be too detrimental to the auctions given the paring in Fed rate hike projections, and expectations for slowing in inflation.