This week's refunding auctions were surely not on anyone's list of the most important events over the next five days, and that's good because moments ago we just concluded the week's first coupon auction when the Treasury sold $58BN in 3 Year paper in a relatively boring affair.

The auction stopped at a high yield of 4.152%, a 27bps jump from last month's 3.878%, and the highest since July; the auction tailed the When Issued of 4.143 by 0.9bps, following last month's 0.7bps tail and the highest since June.

The bid to cover was a modest improvement from last month, rising to 2.60 from 2.45, and above the six-auction average of 2.57.

The internals were also stronger, with Indirects surging to 70.6% from 56.9%, above the six-auction average and one of the highest on record. And with Directs dropping to just 9.6%, the lowest since the covid crisis days of March/April 2020, Dealers were left holding 19.8%, the highest since June.

While the secondary market saw a big drop in yields after Friday's blowout, the mixed auction was spooky enough - largely due to the tail - to send yields to session highs, rising to 4.325% at last check, up from 4.27% at session lows.

It is possible that the market, always clutching for soundbites, merely noted the auction's tail and ignored the rest of the otherwise solid auction; if so watch as yields sink lower in the next few minutes as humans override their dumb algo traders.