We have a double dose of Treasury sales to start the week and the market appears to be having some difficulty digesting the supply. US 5s were up 4.2 bps ahead of the sale to 4.33%.
- Record size of $64 billion
- Bid to cover 2.41 vs 2.31 prior
Prior to this auction, results at 5-year sales over the last six months have been splitting between stop throughs (avg. 1.0 bp) and tails (avg. 1.4 bp).
This 0.8 bps tail pushed yields a half-basis point higher in 5s and a bit less elsewhere. There was no change in the US dollar.