J.P.Morgan Suggest 30s Will Require Concession For a Smooth Auction

J.P.Morgan note that Wednesday will see the Treasury auction "$25bn 30-Year bonds, $2bn smaller than the new last new-issue auction in August. 30-Year yields have fallen 23bp since the October auction, leading the 10s/30s curve to appear too flat after controlling for drivers. The 30-Year roll opened at -0.125bp, inside our estimate range, and is now trading -0.134bp. While the demand for long-duration auctions has been robust in recent months, long-end yields are at their lowest levels in 3 months, curve valuations appear stretched, and liquidity remains impaired; thus, we think it will require a concession to underwrite smoothly."