Treasuries push lower, ebbing amid.......>

US TSYS/5Y: Treasuries push lower, ebbing amid pre-auction shorts/sales into 1pm

ET 5Y auction and post-auction redistribution sales after a holiday- affected

relatively soft 2Y auction earlier. 

- 5Y PROS: Tightness in RP indicates existing shorts; could be US, foreign bid

for 5Ys. 

- 5Y CONS: Low liquidity amid US summer vacations, and UK bank holiday today.

Also compressed auction schedule of 2Y, 5Y auctions both on Monday is a bit

challenging. But traders feel this 2Y auction soft bid is not a big change in

sentiment, just the reaction to low market liquidity, thus not major

implications for 5Y auction. 

- HISTORY: July $34B 5Y auction drew a 1.884% high yld, 1.875% cpn, 2.58 cover,

strong 68.8% indirects, 6.2% directs, low 24.1% dealers.