HALISTER1: RATES: UST 5Y Auction Will Require Some Concession, JPM Says

RATES: UST 5Y Auction Will Require Some Concession, JPM Says

(Bloomberg) -- Five out of last six 5Y note auctions tailed which suggests “a modest concession from current levels will be required to underwrite” $34b sale at 1pm ET, JPMorgan strategists led by Jay Barry say in Feb. 23 note.
  • Primary dealer position in 3Y-6Y sector was highest since mid-2013 in latest reading, “which could make it more difficult for dealers to absorb supply”
  • Although yields have declined by 28bp since last auction and remain near lowest levels of the past year, on a relative value basis, sector now appears ~2bp cheap vs wings after adjusting for level of rates and shape of curve
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
WOBDX US (JPMorgan Core Bond Fund)

People
Jay Barry (JPMorgan Chase & Co)

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