The US is set to sell 30-year bonds in a reopening at the top of the hour.
It’s a $22 billion sale and there has been something of a concession today already with US 30s rising by 1.4 bps to 4.888%.
BMO expects a strong sale:
Today’s $22 bn 30-year reopening will offer a litmus test of the appetite for duration at a moment when there’s been a great deal of focus on long bonds in the global fixed-income market. Ballooning interest payments, runaway federal deficits, and the trade war have underpinned the market’s supply angst and kept upward pressure on term premium. Despite duration’s recent ebb in popularity, there are several reasons why we’re anticipating a solid bid for 30-year bonds this afternoon. First, recent auction results and the price action more broadly imply that Treasuries have retained their safe-haven status and investors have moved on from budget concerns to refocus on the fundamentals of the real economy and monetary policy. Second, Bessent’s disinclination to term out the debt at current yields supports the bull case for duration as the quarterly refunding cycle looms. Third, long bond auctions have tended to go well this year when 30-year rates were above 4.80%
US set to sell 30-year bonds at the top of the hour
