30Y Auction Preview: $18B Post-CPI, Pre-Fed Test

Today's $18B re-opening of 30Y Bond comes at a potentially tricky time, between the closely-watched May CPI reading and the FOMC decision Wednesday.

• The in-line core inflation reading was seen as tilting dovish in the details, which saw Tsys strengthen before fading the gains.
• The 30Y richened briefly, with the When Issued yield dipping a couple of basis points to a session low 3.83% - that has turned to a steepening with 30s cheaper on the curve, and the WI currently standing at 3.92%.
• That's a decent concession and well above the most recent high auction yield of 3.877% set in Mar 2023 - though not the 4.080% in November 2022.
• As with most other coupon auctions in May's refunding month, the 30Y Bond saw a strong sale on May 11 with a 1.4bp trade-through (the biggest since January's 2.2bp) on 3.741% high yield / 3.755% When Issued yield. Periphery stats were good including a solid 2.43x bid-to-cover and high indirect takeup (72.4%, also highest since Jan).
• The 5-auction average sees 2.37x bid-to-cover, 11.1% primary dealer takeup, 70.4% indirects and 18.4% directs.
• Timing: The 30Y Bond sale results will available shortly after the competitive auction closes at 1300ET.