• Prior was 3.420%
  • Bid to cover 2.30 vs 2.65 prior

Bonds have been heavy today led by the belly of the curve as the market flirts with higher terminal-rate pricing. For next March, Fed funds futures are at 3.70%. That said, the odds of 75 bps have come down today.

This is a huge tail on the surface but there was a big bid in bonds in the half-hour before the sale. You can see it here on the cash 20s chart.

US 20s

It's possible there was some kind of arb there or low liquidity but the bid-to-cover also points to soft demand.