Treasury Action: the $40 B 2-year note sale Tuesday
Treasury Action: the $40 B 2-year note sale Tuesday kicks off $113 B in shorter dated coupon auctions. The offering will be followed by a $41 B 5-year and an $18 B 2-year FRN reopening Wednesday, and $32 B in 7-year notes Thursday. Also Tuesday are $26 B in 52-week bills. Yields are diving lower despite supply, still supported by the dovish Fed shift, safe haven flows, downward pressure from other sovereigns, and technicals. The wi 2-year is now 7 bps lower at 2.225%, with the wi 5s off 7 bps to 2.180%, while the wi 7-year is down 5.5 bps to 2.280%. For the 2-year, this would be the lowest stop since January 2018; for the 5s and 7s, it will be the lowest since November 2017. It will be interesting to see if the demand that's knocked rates down here will show up this week. The 5-year has been trading special in repo, and there could be a strong short covering bid.