The US dollar came under pressure after a surprisingly strong auction of US 10-year notes.
Demand was expected to be tepid ahead of tomorrow's CPI report and the FOMC decision but bids were 2 bps below where the market was trading and the $39 billion in new supply was easily absorbed. That was all-the-more surprising given than 15 of the past 16 ten-year reopening auctions tailed.
The result seems to cap US 10s below 4.50%, perhaps as the market sniffs out an economic slowdown and political turmoil. At the same time, it's tough to have any kind of confidence in that call given the events coming in the next 24 hours.
In any case, USD/JPY tracked the move lower in yields, falling to 157.21 from a high of 157.38 just before the sale.
USDJPY 10 min
