Treasury Action: supply kicks off Tuesday with the $40 B 2-year auction
Treasury Action: supply kicks off Tuesday with the $40 B 2-year auction, to be followed Wednesday with the $41 B 5-year, and Thursday with the $32 B 7-year. In addition, there is a $20 B 2-year FRN for Wednesday, and another round of 4- and 8-week bills. When issued yields are all several basis points cheaper, with the wi 2-year up 3.5 bps to 1.595%, the wi 5-year also 3.5 bps firmer at 1.600%, while the wi 7-year is up 4 bps to 1.792%. Despite the cheapening, these will still be some of the richest award rates in 2 or 3 years. Currently the notes are also not very attractive on the curve. The richness to domestic accounts has been a hurdle and has limited demand, though the offerings continue to see decent overseas demand. Analysts expect more of the same this week.