Treasuries Finish Lower

Supply pressures cheapened shorter-dated isses prior to the two-year note auction

Focus on supply was the main story on Monday and the session was cleft into two parts by the Treasury's $27 billion two-year note auction. Plenty of other risk factors swirled like blizzard through the pre-holiday market wasteland, but kinks in the coupon curve were inflicted mostly by supply. Despite the weaker pre-market trade on stocks geopolitical strains, prices at the front-end of the curve were the first to go under as dealers sought to cheapen up the WI two-year notes prior to the auction.

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