The Treasury market today will have a....>

US TSYS/5Y: The Treasury market today will have a 2-part US auction situation:

the $13B 2Y FRN reopening at 11:30am ET and then the $34B 5Y note auction at 1pm

ET. The 5Y note has been tight in the overnight repo for quite a while, which

should suggest good shorts in the issue. There could be some mild month-end

buying to aid the auction too. Also some leveraged accounts bought 5-year notes

on Tuesday and did flatteners. 

- JP Morgan analysts Jay Barry and Jason Hunter noted Treasury yields "rose

modestly across the curve" Tuesday "amid marginally hawkish Fedspeak and mixed

economic data." They add on 5Y auction that "five-year yields have risen 10bp

since the last auction, but the flatness of the curve at the front end leads us

to think that tomorrow's auction should require a modest concession to

underwrite.

- JPM analysts noted the August 5-year auction "cleared at 1.742%, 0.5bp through

pre-auction levels, as end-user demand rose 6.6%-pts to 82.5%, a record for the

series. This was largely driven by foreign participation, which rose to its

highest share since June 2016."