Another soft auction and QT discussion now really important

After a poor 20 yr auction last week, and a few hours ago the 2 yr note auction was soft and just now, the 5 yr was weak too. The yield of 4.32% was one bp above the when issued. The bid to cover of 2.41 was under the one yr average of 2.49. Also, dealers were left with the 2^nd most % of a 5 yr auction since June 2022.

In response, yields are at the highs of the day. For the 2 yr yield, it is at the highest since late November and the 10 yr yield is just 1 bps from the last time it was here in also late November.