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Bond Traders’ Respite From Flattening Curve May Prove Fleeting

  • Combined auctions of 2-, 5, 7-year notes to tally $96 billion
  • Sales seen as ‘dress rehearsal’ for Treasury financing plan
Trading On The Floor Of The NYSE As U.S. Stocks Drop on Tech Selloff
Photographer: Michael Nagle/Bloomberg

Bond traders agonizing over the flattening U.S. yield curve got a bit of a break last week. But with a flood of Treasury supply about to hit the market, they’ll have little time to catch their breath.

The U.S. will issue a combined $96 billion of two-, five- and seven-year notes this week, the largest slate of fixed-rate coupon sales since 2014, according to BMO Capital Markets. After a stretch dominated by Federal Reserve speakers, the offerings are likely to refocus traders on the prospect of ever-larger auctions to cover swelling budget gaps.