Treasury Closing Summary: Treasury Closing Summary: Further unwinding of steepeners remained in vogue, banking profits in front of the holiday weekend. This crowded counter-trend continued to lift yields at the short-end, while driving them lower at the back-end into month-end as a solid duration extension looms and desks begin to clear out. A firmer run of housing permit and home price data was largely offset by a slump in consumer confidence. 5-year supply was hungrily absorbed, even amid the lack of a concession for the issue. The U.S. airforce also challenged China's new unilateral wider ADIZ over disputed islands with Japan.
U.S. Michigan Consumer Sentiment Preview U.S. Michigan Consumer Sentiment Preview: The second release on Michigan Sentiment for November will be released on Wednesday in advance of the Thanksgiving holiday. Analysts expect the headline to be revised up to 74.0 (median 74.8) from 72.0 in the first release. There has been a fairly consistent pattern of upward revisions in the second release over the past year which poses some upside risk to tomorrow's release.
Treasury's $45 B 4-week bill auction was as little soft Treasury's $45 B 4-week bill auction was as little soft as results underperformed recent offerings. The bill was awarded at 0.065%, right on the bid at the deadline (and vs 0.06% stop last week). Bids totaled $169.4 B for a 3.78 cover, down versus the prior 4.08 and the 3.97 average. Indirect bidders were awarded 21.7% compared to 29.1% last week.
Treasury Option Action: light vol selling crept into the mix Treasury Option Action: light vol selling crept into the mix with sources spotting a sale of 1k in Feb 125.5 straddles on 10-year futures, as the price for that trade ticked back up in early trade compared to yesterday's close. With a floor under prices heading into month-end and the holiday break, vol sellers seem likely to remain in charge all else equal. Dec 10s are 7.5-ticks firmer near 126-29 compared with a range of 126-315 to 126-215 for now.