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Strong, Stopping Through 3 Year Auction Ahead Of Yellen Testimony

The US Treasury sold $24 billion in 3 Year paper at a yield of 1.573%, the highest since 1.63% in March and above the 6-month average of 1.52%, if stopping through the When Issued of 1.576% by 0.3bps.

The internals were also solid, with the bid-to- cover at 2.87, below June's 3.00 however, again better than the 6-MMA of 2.81. Total bids of $69.4b for $24.5b in notes sold vs six previous auction average of $69.5b in bids for average of $26.0b in notes sold

Foreign demand dipped modestly, with indirects taking down 52.6%, below the June near record 65.6%, and slightly less than the 6 month average of 54.9%. the Direct Bidder takedown rose, leaving with 9.9% of the auction, and above the 6MMA of 7.8%; this was the highest Direct Award since October's 10.1%. Primary Dealers were left with 37.6%, higher than the June 28.2% if right on top of the 6 month avg of 37.3%.

Overall, a solid auction and one which coming a day ahead of Yellen's Congressional testimony suggests there is little fear in the bond market that the Fed chair can unveil any major hawkish surprises.