This could be the day the dam finally bursts.
The US hasn’t sold 10-year notes with a 3% yield since mid-2011, just before the Fed signaled QE3. Now that the Fed has signaled the end of QE is it time for yields to break the key level? The most-recent auction sold at 2.82% in December but the 10-year note is trading at 3.000% on the bid side in the ‘when-issued’ market. Benchmark 10s are a Nov 2023 expiration trading at 2.993% so there is a slight time premium to add.
The results of the $26B sale will be released at the top of the hour. Today’s 5 bps rise in 10-year yields has underscored USD gains and a sale above 3% would add momentum.
