US sells $21 bln in 10-year notes at 3.90%, bid to cover 3.72

Super strong auction.

Yields are falling across the curve after the auction and were rallying strongly into the auction. We started the day near 3.95% and trade now at 3.89%.

Crossing the wire a few seconds ahead of the auction results was a comment from NY Fed president Dudley that the fiscal path of the US is not sustainable and that we need a viable exit strategy from fiscal stimulus.