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3Y Preview: Solid Outright Concession Despite Recent Rally

US TSYS/SUPPLY
  • Treasury sells $58bn of 3Y notes (91282CKJ9) at 1300ET.
  • 3Y yields have fallen 5.5-6bps since yesterday’s fresh YtD highs of 4.615% but still offer decent outright concession compared to March’s solid auction (the WI currently at 4.5425% is some 29bps higher than last month’s high yield).
  • The March auction traded through by 1.1bp and there has been a five-auction average trade through of 0.3bps despite a sizeable 1.8bp tail back in Dec.
  • The bid-to-cover was 2.60x and has averaged 2.59x over the past five auctions.
  • March saw particularly good internals as well, with primary dealer take falling to 14.4% for its lowest since Aug (5-auction av 18.1%) and indirect take rising to 70.0% for its highest since Aug (5-auction av 63.6%).

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