Human Interest

An ugly 2Y auction (with the highest yield since 2008) on Tuesday, a mediocre 5Y auction yesterday, and now a blistering 7Y auction, in which the Treasury sold $28 billion in "curve belly" notes at a high yield of 2.13%, stopping through the When Issued by a surprisingly strong 1.1bps, the highest since April.

As Stone McCarthy described the auction in one word, "Tremendous", noting it a buyside takedown which was the second largest on record.

With just two days left until the end of the third quarter, what happened in Q2 will hardly provoke a market reaction, which is why when the BEA announced that the third and final Q2 GDP print was revised from 3.0% to 3.1%, (or specifically from 3.049% to 3.06%) it hardly inspired a move in risk assets, even though it did come in fractionally better than the 3.0% expected, and more than double the 1.2% Q1 GDP print.

Wholesale Inventories jumped 1.0% MoM in August, the fourth consecutive build in inventories in a row and the fastest monthly build since Nov 2016.

This is the fastest annual growth rate for inventories since June 2015 as it appears producers embrace the idea that 'if they build it, they will come'.

Perhaps most notably, motor vehicles saw the biggest rise (+1.2% MoM, +7.4% YoY) as sales collapse.

Unlike yesterday's ugly 2Y auction which printed at the highest yield since October 2008, the just concluded sale of $34 billion in 5 Y paper was solid if uneventful, stopping on the screws with the When Issued at 1.911%, the highest yield since March 2017. Non-comps were $103.9 million, up from $92.0 million last month.

The bid to cover of 2.52 was lower than the past two months, if slightly higher than the 6 month average of 2.48.

Republican Senator Bob Corker on Tuesday announced he will not run for reelection next year, and will retire at the end of 2018 .

“After much thought, consideration and family discussion over the past year, Elizabeth and I have decided that I will leave the United States Senate when my term expires at the end of 2018,” Corker said in an emailed statement.

The Senator, who last year was ranked the 23rd richest member of Congress with a net worth of roughly $18 million...