The yield on the 10-year Treasury didn’t move much today, Monday, March 22, with the yield dropping 3 basis points to 1.69%.
Treasury volatility could pick up big time later this week as the government auctions off Treasuries across a range of maturities. The action will reach a crescendo on Thursday as the U.S. Treasury auctions off $62 billion in seven-year notes. It was a disastrous failed auction of that maturity about a month ago that matched up the volatility in the Treasury market.
The auction calendar includes 52-week bills and 2-year notes on March 23, 2-year floating-rate notes and 5-year notes on March 24, and -year notes on March 25.
Just a reminder on what happened at the auction of seven-year notes in February. With the bond market already nervous, the government attempt to sell a large amount of this maturity and received record low bids for the sale.
The seven-year note has been a locus of selling lately since that maturity is the current battle ground for bond traders who want to bet that the Federal Reserve will raise interest rates sooner than in its recent projections.
Last week marked a seventh straight week of selling in the Treasury market.