As we noted here, the Treasury announced it would raise the amount of long-term debt it sells to $78 billion this quarter, up from $73 billion last quarter, while launching a new two-month bill.
The surprise is that whereas consensus had expected 5-year auctions to increase by $1 billion in the quarter, the Treasury will now increase the auction amount by $1bn every month in the quarter, for a total of $3 billion, which in turn will put extra pressure on the belly of the curve.
And that extra supply has prompted weakness across the Treasury curve, pushing 10Y Yields back above 3.00% for the first time since The Fed hiked rates in June…
And the yield curve is steepening…
All of this ahead of The Fed this afternoon.
via RSS https://ift.tt/2LHaCVg Tyler Durden