10-Year Auction Taken In Stride

T-Notes print -0-01+ at 132-15+, operating a little shy of Wednesday's peak. Recent commentary from Tsy Sec. Yellen saw her note that the U.S. "could reach full employment by as soon as next year. Our Treasury team will be doing everything we can to accelerate the recovery."

• As a reminder Wednesday saw the curve steepen and the belly outperform, with 30s finishing ~0.5bp cheaper while the 5- to 7-Year sector richened by 1.5bp. The space recovered from intraday cheaps on the back of the softer than expected CPI print (with subsequent readings set to be skewed by COVID related base effects). The richening ultimately resulted in a 1.0bp tail at Wednesday's heavily watched round of 10-Year Tsy supply, with the cover ratio holding steady around recent averages and dealer participation ticking up to above recent average levels. Still, the market took the auction in its stride given the aforementioned richening and decent enough internals (remember that last month's soft 7-Year supply resulted in increased scrutiny of this particular offering). Wednesday also saw the House pass the amended COVID-19 relief Bill, President Biden is expected to sign the Bill on Friday. NY flow saw a TY/WN block steepener and UXY block buyer.
• There is nothing in the way of tier 1 risk slated during Asia-Pac hours, with focus on Thursday's ECB decision, 30-Year U.S. Tsy supply and weekly jobless claims data.