The US is set to sell $49 billion in 5-year notes today at what will be the highest levels since 2007.
The on-the-run 5s are trading at 4.66%, up 3.6 bps today. You would think there would be some downward pressure on yields as real money creeps in to grab some decent yields but evidently no one wants to show bonds on the quarter-end books.
The big concession today might draw some fresh bids and a surprisingly strong auction (i.e. lower yield) and that would weigh on USD/JPY more broadly but it’s tough to have much confidence in that view given the relentless selling in bonds this month.
You have to go back a long ways to get 4.66% 5s