Treasury Action: this week's refunding coupons are all profitable
Treasury Action: this week's refunding coupons are all profitable thanks to the continued rally in Treasuries. The initial reception to the 3-, 10-, and 30-year auctions was ok to a little sub-par, but they are all doing well in secondary trading. The 3-year, awarded at 2.502% and is at 2.448% currently. The 10-year tailed to 2.681% and is at 2.645%, while the 30-year was awarded on the screws at 3.022% and now trades at 2.986%. Supply is light over the near term with only bills, 10-year TIPS, and the 2-year FRN on tap prior to the next batch of coupons with the 2-, 5-, and 7-year package not on the auction block until February 25 and 26. And the Treasury indicated it will be keeping auction volumes unchanged this quarter, so supply shouldn't be much of a hurdle for now.