Treasury 7-year outlook:
Treasury 7-year outlook: the $32 B 7-year auction is expected to suffer from expensive yields, along with Fed and trade uncertainty, which weighed on the 5-year sale Wednesday. However, today's offering should benefit from dome front running of month-end duration buying. The when issued yield is 1 bp lower at 1.905%, which is 24 bps below the 2.144% stop from May, and an award rate here would be the lowest since October 2016. Again, a lot of the slide in rates since the last auction has been a function of aggressive Fed rate cut bets, some of which have been unwound. Meanwhile, the note is a little cheaper on on the 3s7s10s butterfly, but richer versus the long end of the curve. The auction could benefit from some short covering, as well as an indirect bid as the note offers a big yield pick-up to foreign sovereigns, some 246 bps to the German equivalent. The May 7-year auction was poor. It stopped at 2.144% and saw a 2.30 cover (2.50 average) and a 58.3% indirect bid (61.3% average). Direct bidders accepted 11.3% (17.4% average).