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Preview $27B 20Y Tsy Auction

US TSYS/SUPPLY

Tsy futures are trimming early session gains ahead this afternoon's April FOMC minutes release. Meanwhile, the 20Y WI is trading around 2.265% to 2.260%, still well above the 5 month running average of 1.89%.

In light of the 20Y auction performance over the last few months, bond traders remain a cautious, broader markets have paid close attention to the past three 20Y auctions as well:

  • Tsys traded higher after a decent $24B 20Y auction reopening last month: drawing a high yield of 2.144% (2.290% last month) 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 21 drew a huge 2.3bp tail: drawing 1.920% high yield vs. 1.897% WI.

The April auction indirect take-up was 58.73% vs. March of 61.4% the highest since October (with Nov-Feb all between 54.89%-61.22%). Primary dealer take-up of 21.09% the lowest in over a year (5 month average of 25.18%). Direct take-up surged to 20.18 -- also the highest in over a year.

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