Insights into this week's US Treasury refunding: 3-, 10-, and 30-year overview. Insights into this week's US Treasury refunding: 3-, 10-, and 30-year overview. Insights into this week's US Treasury refunding: 3-, 10-, and 30-year overview.

Insights into this week's US Treasury refunding: 3-, 10-, and 30-year overview.

Althea Spinozzi

Head of Fixed Income Strategy


  • This week’s three- and ten-year auctions are likely to draw solid demand. Despite record large auctions size, the risk-reward offered by these tenors is favorable amidst the macroeconomic backdrop.
  • Monitor the 30-year tenor for duration demand. The 30-year tenor might offer crucial insights into investors’ duration preferences. Given persistent inflation, extending duration remains a directional bet on disinflation pressures and early rate cuts.
  • Robust duration demand could drive 10-year yields down to 4.31%. Yet, as inflation remains sticky a rebound above 4.5% in 10-year yields is likely.

Anticipated Market Dynamics.

The US Treasury is set to auction $125 billion worth of coupon-bearing US Treasuries this week, spanning 3-, 10-, and 30-year tenors. Encouragingly, May brings with it $286 billion in coupon redemptions, $154 billion of which are due next week, bolstering demand and likely resulting in robust bidding metrics despite ongoing quantitative tightening (QT) operating at full speed this month, with plans for a slowdown next month.

We anticipate positive market reception for the 3- and 10-year US Treasury auctions, while exercising caution regarding the 30-year tenor. Although the auction size for the 3- and 10-year Treasuries is poised to reach record highs, their risk-reward profile appears compelling amidst a continuously evolving macroeconomic landscape. This should position the notes favorably to capitalize on upcoming redemptions and potential rotation from riskier assets.

In contrast, the proposition presented by the 30-year bonds is distinct, carrying the highest duration in the US yield curve and offering a yield lower than those in the front end of the curve. Extending duration at a time when inflation remains persistent suggests a directional bet on swift disinflation pressures, likely leading to early and aggressive rate cuts.

Interestingly, over the past two years, 10-year US Treasury auctions have often tailed When-Issued trading, with only four months seeing stop-throughs. Conversely, stop-throughs are more frequent in the 3- and 30-year tenors, with 30-year auctions experiencing tails in 11 out of 24 instances. The outperformance of 30-year auctions over 10-year auctions may be attributed to their smaller size, which mitigates the risk of tail.

What implications does this hold for bond markets?

This week will test the demand for duration. The positive sentiment prevailing in bond markets comes at a time when supply is entering the market. Following the release of weaker-than-expected nonfarm payrolls data, bond markets have adjusted their expectations, now pricing in two rate cuts by year-end, compared to nearly one cut just days earlier. This shift has resulted in lower yields across the yield curve.

Should strong bidding metrics and a stop-through occur for the 10- and 30-year notes, it could amplify the rally, potentially driving 10-year yields down to 4.31%.

Conversely, if bidding metrics are weak, particularly concerning longer-duration issues, we might observe further bear-steepening of the yield curve.

As divergence between the yield price and RSI suggests, the former is more likely. Yet from a mid-term perspective yields are likely to continue to rise if inflation remains sticky.

Source: Bloomberg.

Analyzing the upsides and downsides of this week's 3-, 10-, and 30-year auctions.

Source: Saxo Group.

Other recent Fixed Income articles:

02-May FOMC Meeting Takeaways: Why Inflation Risk Might Come to Bite the Fed
30-Apr FOMC preview: challenging the March dot plot.
29-Apr Bond Markets: the week ahead
25-Apr A tactical guide to the upcoming quarterly refunding announcement for bond and stock markets
22-Apr Analyzing market impacts: insights into the upcoming 5-year and 7-year US Treasury auctions.
18-Apr Italian BTPs are more attractive than German Schatz in today's macroeconomic context
16-Apr QT Tapering Looms Despite Macroeconomic Conditions: Fear of Liquidity Squeeze Drives Policy
08-Apr ECB preview: data-driven until June, Fed-dependent thereafter.
03-Apr Fixed income: Keep calm, seize the moment.
21-Mar FOMC bond takeaway: beware of ultra-long duration.
18-Mar Bank of England Preview: slight dovish shift in the MPC amid disinflationary trends.
18-Mar FOMC Preview: dot plot and quantitative tightening in focus.
12-Mar US Treasury auctions on the back of the US CPI might offer critical insights to investors.
07-Mar The Debt Management Office's Gilts Sales Matter More Than The Spring Budget.
05-Mar "Quantitative Tightening" or "Operation Twist" is coming up. What are the implications for bonds?
01-Mar The bond weekly wrap: slower than expected disinflation creates a floor for bond yields.
29-Feb ECB preview: European sovereign bond yields are likely to remain rangebound until the first rate cut.
27-Feb Defense bonds: risks and opportunities amid an uncertain geopolitical and macroeconomic environment.
23-Feb Two-year US Treasury notes offer an appealing entry point.
21-Feb Four reasons why the ECB keeps calm and cuts later.
14 Feb Higher CPI shows that rates volatility will remain elevated.
12 Feb Ultra-long sovereign issuance draws buy-the-dip demand but stakes are high.
06 Feb Technical Update - US 10-year Treasury yields resuming uptrend? US Treasury and Euro Bund futures testing key supports
05 Feb  The upcoming 30-year US Treasury auction might rattle markets
30 Jan BOE preview: BoE hold unlikely to last as inflation plummets
29 Jan FOMC preview: the Fed might be on hold, but easing is inevitable.
26 Jan The ECB holds rates: is the bond rally sustainable?
18 Jan The most infamous bond trade: the Austria century bond.
16 Jan European sovereigns: inflation, stagnation and the bumpy road to rate cuts in 2024.
10 Jan US Treasuries: where do we go from here?
09 Jan Quarterly Outlook: bonds on everybody’s lips.


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992