US to sell USD 31bln 7-year notes at 1300 EST/1800 BST

The US Treasury will auction USD 93bln in 2s (USD 37bln on Monday), 5s (USD 38bln on Tuesday) and 7s (USD 31bln on Thursday); with USD 13bln maturing at the end of the week. The US will also sell USD 17bln of 2yr FRN this week. This week brings approx. USD 93bln of redemptions and approx. USD 8bln of coupon payments. The FOMC rate decision has set the tone for Thursday’s 7-year auction, with analysts noting that the recent sell-off of Treasuries has lifted the 7s yield to above 3%, making the WI yield cheaper compared to the previous stop-out rate, which analysts say could provide support. In addition, Societe Generale says that any short-covering from the record net shorts from leveraged funds in the TY futures could also provide support, while the auction may also benefit from month-end extensions. The 7-year has also cheapened on the fly over the last fortnight vs 5s and 10s, which could be a positive. SocGen holds a slightly positive bias going into the auction.