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