We will get US 10-year auction results at the top of the hour. Today's ISM services number highlights the upside risk for yields as it showed a strong economy (though with lower prices). The market is now leaning heavily towards a January pause from the FOMC.
On the run 10s are trading at 4.345% at the moment and BMO doesn't think they will get any help from the auction:
The event risk created by the election has kept investors largely sidelined for the last few weeks, and even with 10-year rates back above 4.30% this morning, we struggle to imagine a particularly aggressive bid given the proximity to such a defining moment for global financial markets. The lackluster demand for Monday's 3-year supply is consistent with this observation – and because 10-year auctions tail roughly three-quarters of the time when the preceding 3-year offering tails by more than half a basis point, we've been left increasingly wary of the need for a concession this afternoon. We'll look for a tail at 1pm EST with uncertainty running high at the current juncture.
