The US will reopen the latest sale of 10s in an auction today and it's sure to feature the highest yield since 2007.
The cash market is trading at 4.29% and that's a pretty good idea of where this one will land. BMO thinks it could undershoot, which might weight on USD/JPY:
It’s going to be the highest yielding auction since 2007 which should ensure a decent backstop of dip-buying demand – especially considering we’ve begun to see more consistent evidence of the lagged influence of monetary policy. Despite the implications from larger issuance, the fact last month’s 10-year new issue stopped effectively on the screws with a >90% non-dealer award while clearing nearly 30 bp lower in yield than current levels gives us a reason to be encouraged heading into the event.
