US sells 20-year bonds at 3.380% vs 3.355% WI

• 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 Liquidity Liquidity refers to the extent of a financial instrument’s ability to be bought or sold without causing price fluctuations. Thus, if an asset is extremely liquid, it means one can trade that asset in the knowledge that one’s specific dealing won’t create significant movements in the market.This is because there exists such a large number of traders going both long and short, generating huge volume for that particular asset. Liquidity in the FX MarketTake the example of the foreign exchange marke Liquidity refers to the extent of a financial instrument’s ability to be bought or sold without causing price fluctuations. Thus, if an asset is extremely liquid, it means one can trade that asset in the knowledge that one’s specific dealing won’t create significant movements in the market.This is because there exists such a large number of traders going both long and short, generating huge volume for that particular asset. Liquidity in the FX MarketTake the example of the foreign exchange marke Read this Term but the bid-to-cover also points to soft demand.