$53B 5Y Auction Set-Up

WI running 0.590% / 0.585% ahead the US Tsy $53B 7Y Note auction (91282CAU5) auction that drew 0.462% last month vs. 0.460% WI. Sell-side analyst opinions:

• Bank of Montreal said "there has been a good outright concession and today stands to be the highest yielding auction since May. On the curve, 7s have cheapened over the past month and the 5s/7s/10s butterfly is at levels that should inspire demand; especially after seeing the bid that met 5s yesterday." On the flipside, BMO said the "election has been insufficient to drive any meaningful hesitation on the part of primary market participants so far this week, but the event risk warrants a nod nonetheless. TY spec positioning has stabilized at effectively flat which removes any positional washout as a potential tailwind to a rally.
• Cantor Fitzgerald's Justin Lederer expects "decent demand as the issue is currently setting up to be underwritten at the highest yield March." However, "market participants will be cautious with their setups/bids given the potential headline risk".