JPM Suggest 30-Yr Supply Will Require Some Concession To Pass Smoothly

J.P.Morgan note that Thursday will see the Treasury auction $24bn reopened 30-Year bonds, "unchanged in size from the last reopening auction in April. Since the May auction, 30-Year yields have declined by 23bp and the 10s/30s curve has flattened 4bp, but after adjusting for its drivers this move appears justified. Although liquidity at the long end has vastly improved, with current 30-Year market depth almost 2 standard deviations above its 1-Year average, we think with the recent decline in yields this supply will require some concession from current levels to underwrite smoothly."