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Preview 10Y Note Auction

US TSYS/SUPPLY

Tsy futures holding near late morning lows ahead the $36B 10Y-Note auction re-open (91282CDJ7), cheaper and steeper a nice concession with sale at 1300ET.
WI is currently running around 1.530% (appr 50% fibonacci of 1.69%-1.33% move), appr 8.6bp cheap to last month's high yield. November recap:

  • Tsy futures slipped off highs after $39B 10Y note auction (91282CDJ7) tailed:1.444% high yield vs. 1.430% WI; 2.35x bid-to-cover well below five auction avg: 2.56x
  • Indirect take-up remains high at 71.01% vs. 71.05% last two auctions; direct bidder take-up falls to 13.80% vs. 17.74% last month while primary dealer take-up bounces to 15.19% vs.1 1.21%, well shy of the 13.58% 5M average.

Timing: The 10Y note re-open results will available shortly after the competitive auctions closes at 1300ET. The next 10Y auction is tentatively scheduled for January 12.

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