U.S. Treasuries reversed early gains Wednesday put continued to churn pinned into tight ranges in light volumes ahead of the 10-year note auction (1 p.m. ET). Participants are cautiously optimistic into the sale after Tuesday’s three-year Treasury offering beat expectations, but attention will be focused on equities for general direction. New corporate supply is also expected to keep a cap on prices into the 10-year.
The 30-year recently traded xxx having been stalled near that point from an overnight high yield/low price near 2.9825% from a little-changed 2.97% close Tuesday. The 10-year settled has been held near 2.39% versus an early 2.395% low and quiet 2.38% close. The five-year is near 1.89% after slipping to 1.8955% from a close near 1.88%. The two-year has been recently dragged to near 1.20% having been tethered to near unchanged at 1.195%.
The curve trade has been mixed but little changed with the yield spread between the two- and 10-years just inside 1.19 from 1.18 plus while the yield gap between the five- and 30-years has edged along a flatter slope near 1.07 plus from 1.09 Tuesday.