With the 3Y trading rather tight in repo ahead of today's auction, and if not outright special, touching on 0.1% according to SMRA, suggesting yet another notable short seller overhang...

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...moments ago the US Treasury announced that it sold $24 billion in 3Y paper in a strong auction in which the repo tightness helped the high yield print at 1.423%, stopping through the when issued 1.427% by 0.4 bps, despite a Bid to Cover which dipped from last month's 2.968 to 2.782.

The internals were impressive with the Indrects taking down 57.2%, the highest since last May's 61.5%, while Dealers were left with just 34.7%, the lowest since last August's 33.7%, leaving 8.1% to Direct bidders.

Overall a strong auction, which may have been predicated by today's risk reversal and modest, dollar decline, and flight to safe instruments.

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