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J.P.Morgan Think 10-Year Supply Will Require Some Concession

US TSYS

J.P.Morgan note that Wednesday will see the Treasury auction “$36bn 10-Year notes, $1bn smaller than the last new-issue auction. The 10-Year roll opened at -0.375bp and is now trading at -0.75bp, roughly in line with the erosion of carry. Reduced risk appetite could make tomorrow’s auction challenging: our Treasury client survey, released this morning, shows that short duration positioning has been sharply reduced since the start of the year and the share of neutrals remains near the highest level since March 2020. Overall, despite cheap valuations, given the recent decline in yields, impaired liquidity, and reduced risk appetite, we think tomorrow’s auction will require some concession from current levels in order to be digested smoothly.”

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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