Treasury $32 B 7-year auction:
Treasury $32 B 7-year auction: the note could see decent demand after the better than expected 5-year sale yesterday, with the cheapening in the issue, and with the advent of month-end ahead of the long holiday weekend. The when issued has cheapened 2.8 bps to 1.465%. But a stop there would be 50 bps below July's and the lowest since September 2016. However, the note does look relatively attractive against the long end amid flattening trades. Month-end could support too, although re-balancing flows into stocks might offset somewhat. The Bloomberg Barclays index is projected to extend out 0.12 years, modestly stronger than the last September's 0.11 years, as well as the 12-month average of 0.08 years. But, it's in line with the 10-year average for a September. Despite the improved tone today, ongoing global angst (tariffs on September 1), the tame inflation outlook, and a likely rate cut next month should underpin too. The note provides a 235 bp yield pick-up to the German 7-year. The July auction stopped at 1.967% and garnered a 2.27 cover (2.47 average), and a 59.4% indirect bid (60.5% average), while direct bidders took 15.8% (18.5% average). Primary dealers were awarded 24.8% (21.1% average).