In this week's first TSY auction, moments ago the US Treasury sold $24.0BN in 3-year paper at a yield of 1.657 percent, matching or "on the screw" with the 1.657 When Issued. This was the highest stop on a 3Y auction in over 7 years, or since April 2010.

And unlike last month's poor 3Y auction which saw one of the lowest Indirect takedowns in recent year, today's auction saw solid bid-side demand, with the Bid to Cover rising to 2.83 from last month's disappointing 2.70 if still below the 6 month average of 2.85.

The internals were solid as well, with Indirect bidders awarded 54.3%, also above last month's 46.2%, but below the previous six auction average of 55.2%. There was a small drop in the Direct award to 7.1%, from 10.4% last month and below the 6MMA of 9.0%, leaving Dealers holding 38.6%, less than last month's 43.4%, and in line with the auction average of 35.8%.

Ultimately, a solid auction and one which sets the stage for tomorrow's 10Y reopening.