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It’s all about bonds today with a pair of auctions

Light schedule today otherwise

The economic calendar in North America today is barren but the Treasury auction calendar is full. The US is selling both 3-year and 10-year notes in a rare double-header.

The longer-end sale at 1300 GMT is where the focus will be after last week’s big bond rally. Treasuries are holding steady at the moment with 10s at 1.3427%, down 1.3 bps on the day.

The reason for the double-header sale followed by 30s tomorrow is the desire to have settlement on the 15th.

One of the theories behind the latest bond rally is that supply constraints because of a lighter auction calendar, debt ceiling and $120B in Fed bond buys a month. I’m skeptical but today’s sale should help to provide some answers.

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