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Twist Flattening Ahead Of Sizeable Supply

US TSYS
  • Having largely unwound the overnight sell-off, 2Y Tsys have found more resistance of late with yields still 4bps above Friday’s close.
  • This comes ahead of substantial Tsy supply, with the $50B 2Y (1130ET) and $51B 5Y (1300ET) note auctions along with a combined $105B in bills also at 1130ET.
  • Meanwhile, longer-term yields slide further, with the 10Y and 30Y rallying 5.5-6.0bps.
  • This sees 2s10s almost 10bps flatter at 11.5bps, off an earlier low of 9bps which had moved within 15bps of the brief inverted lows in mid-2019.

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