Treasury 30-year auction outlook:
Treasury 30-year auction outlook: the $16 B reopening is the last of this week's $78 B in sales. Yesterday's 10-year reopening was solid, but Tuesday's 3-year was terrible. Given the strong demand on the 10-year, this offering could go well. Inflation seems contained for now. The bond is underperforming on the curve with the when issued yields 2 bps cheaper at 3.025%. But it's 14 bp rich to December's 3.165% stop (but has the same 3.375% coupon from the November reopening). An award rate here would be the lowest since July. It's also cheaper on the curve and provides a 50 bp pick up to the 3-year and 30 bps to the 10-year. It offers a 217 bp pick up to the German 30-year. The bond could garner a bit of a short covering bid as it's a bit tight in the repo market. There will be competition from the corporate side with several issues on tap. The December auction stopped at 3.165% and saw a 2.31 cover (2.36 average), while indirect bidders took 66.4% (62.7% average). Direct bidders were awarded 11.5%.