Treasury 30-year auction preview:
Treasury 30-year auction preview: the $16 B reopening should see decent demand, assuming there's no last minute flop from Fed Chairman Powell in his upcoming comments -- analysts doubt there will be. The wi bond remains slightly cheaper at 3.020%, although it's 14.5 bps rich to the December offering, and would be the lowest stop since July. The bond is also attractive on the curve, having steepened versus the rest of the curve. It also offers about a 217 bp yield pick up to the German 30-year. The slippage in inflation expectations and beliefs the FOMC is out of the tightening game for now are also supportive. However, there's some concern that the FOMC might shift its portfolio toward shorter dated maturities, as mentioned in the minutes yesterday. Analysts don't expect such a change, but it may be a headwind at the margin. The bond could garner a bit of a short covering bid, playing off of the tightness (albeit modest) in 10-year note in the repo market. 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%. Primary dealers accepted 47.2%.