Treasury Action: yields have mostly edged up as Wall Street recovers
Treasury Action: yields have mostly edged up as Wall Street recovers from its deepest losses, though the long bond continues to outperform. The improvement in equities is also allowing some concessions into the $78 B in coupon auctions that begin Tuesday with the $38 B 3-year sale. The wi 3-year has risen 1 bp to 2.725%. The wi 10-year (reopening) is 0.5 bps firmer at 2.855%, while the wi 30-year (reopening) is down 1 bp at 3.135%. But despite the slight cheapening in the 3s and 10s, award rates at these levels would be lower than those of the last several months, and that may deter some buyers. The 3-year could be especially encumbered by the likelihood of a December 19 rate hike. The longer maturities may benefit from eroding inflation expectations and curve flattening flows.