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J.P.Morgan note that Thursday will see the Treasury "auction $19bn new 5-Year TIPS, $1bn larger than the last new-issue auction. Since the June auction, 5-Year real yields have declined by 30bp, but have climbed approximately 25bp off their all-time lows in late summer. Meanwhile, breakevens are roughly 30bp wider, trading near their widest levels since 2006: most of this widening has been justified by improving fundamentals, but 5-Year breakevens appear somewhat wide after adjusting for their fundamental drivers. Core inflation has come off its firmest run rate over the summer, but the shift from firming goods prices to firming shelter inflation could indicate more persistent inflation. Finally, the September headline CPI print implies carry on long 5-Year TIPS positions should remain somewhat positive, albeit not nearly as positive as it was during the spring. Against this backdrop, retail demand for TIPS has remained strong, as inflows into TIPS ETFs over the last three months have run at a rate not seen since the summer of 2020. Net of these factors, though valuations appear modestly rich and this auction size is $1bn larger than the last new-issue auction in April, underlying positive fundamentals should allow this supply to be digested without incident."