US Treasury Market Daily: 3-year auction preview

Research evidence excerpt

US Treasury Market Daily: 3-year auction preview

Jay Barry AC (1-212) 834-4951 Harry Downie (1-212) 270-9500 Global Markets Strategy J P M O R G A N

john.f.barry@jpmorgan.com harry.j.downie@jpmorgan.com US Treasury Market Daily

J.P. Morgan Securities LLC 06 July 2026

Jason Hunter AC (1-212) 270-0034 Liam L Wash (1-212) 834-5230

jason.x.hunter@jpmorgan.com liam.wash@jpmchase.com

Market views

Front-end yields fell by 1-2bp and the curve steepened 2bp, despite decent domestic

data. The ISM services release continued to suggest stable growth in the first half of

2026. The employment measure jumped from 47.9 in May to 51.2 in June (consensus:

48.2), while prices paid declined from 71.3 to 67.7 (consensus: 67.5), responding to the

pullback in energy prices, though remaining elevated (see US: Services surveys point to

stable growth over 1H26, Abiel Reinhart, 7/6/26). Looking ahead to tomorrow, Treasury

will auction $58bn 3-year notes at 1pm, unchanged in size from last month. The June

auction cleared 0.3bp cheap to pre-auction levels, even as end-user demand increased by

1.6%-pts to 84.7% (Figure 1TheJuneauctioncleared0.3bpcheaptopre-auctionlevels,thoughend-userdemandincreasedby1.6%-ptsto84.7%). Auction allotment data suggest this increase came from a

small uptick in investment manager demand, while foreign participation was unchanged

from the local low observed the month prior.

Figure 1: The June auction cleared 0.3bp cheap to pre-auction levels, though end-user demand

increased by 1.6%-pts to 84.7%

Statistics for 3-year Treasury auctions; units as indicated

Date Yield (%) Size ($bn) Tail (bp) Bid/ cover Direct (%) Indirect (%) End user (%) Foreign (%) Inv. mgr (%)

12-Jan 3.609 58 -0.1 2.65 29.5 56.5 86.0 17.6 66.9

10-Feb 3.518 58 0.0 2.62 31.9 57.1 89.1 16.4 71.7