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Preview $24B 20Y Tsy Auction Re-Open

US TSYS/SUPPLY

Tsy futures are holding steady to mildly weaker in the short and long end of the curve -- holding narrow channel near session lows ahead Wed's FOMC policy annc.
The 20Y WI is trading around 2.135% to 2.130% vs. 5 month running average of 2.056%. Bond traders remain a cautious of 20Y auctions in light of past performances and affect on broader markets over the last few months:

  • Tsys futures trade lower after weak $27B 20Y auction on May 19: drew a high yield of 2.286% vs. 2.275% WI.
  • Tsys traded higher after a decent $24B 20Y auction reopening on April 16 drew a high yield of 2.144% vs. 2.150% WI.
  • Tsys surged higher in a relief rally after the March 16 auction reopening traded strong: drawing a high yield 2.290% vs. 2.315% WI.
  • Tsys gapped lower after he $27B 20Y auction on Feb 17 drew a huge 2.3bp tail: drawing 1.920% high yield vs. 1.897% WI.

The May auction indirect take-up was 56.72% vs. 58.72% in April (5M avg of 58.29%). Primary dealer take-up of climbed to 23.75% vs. 21.09% in April. Direct take-up remained slipped to 19.51% vs. 20.18% in April -- still well above 17.54% 5M avg .

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