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Preview 2/2: 10-year Note Auction


Monday afternoon's $38B 10Y note auction re-open remains a similar size to the auctions since December, with the exception of an increase of $3B to $41B at the February auction.

  • Given last month's slight tail (0.3bp) and the rise in yields since then, markets will be watching very closely whether another tail may occur. The 10Y yield is currently running around 1.65% vs. last month's $38B 10Y auction re-open (91282CBL4) that drew a 1.523% high yield vs. 1.520% WI.
  • Bid-to-covers have been very consistent recently at 2.38x in March and in a 2.32x-2.47x range over the past five auctions.
  • Indirect take-up at 56.81% in March was the lowest since November (with Dec-Feb all between 60.6%-62.3%). Primary dealers stepped in to take their highest percentage since November.
  • Direct take-up has been consistently around the 17.5-18.9% area in the last three auctions, higher than the 13.1%-14.8% area seen between Aug-Nov.
  • The next 10Y auction is tentatively scheduled for May 12.
  • Timing: The 10Y note will be auctioned alongside the 13W bill with results available shortly after the competitive auction closes at 13:00ET/18:00BST.

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