Amid all the chaos in markets over the past few days, it is perhaps no surprise that 'demand' for bonds would be somewhat weaker. However, today's 10Y auction was very ugly.

The sale stopped at 3.96%, tailing by a little more than 3 bps...

...as bid/cover of 2.32 was the lowest since December of 2022.

In fairness, indirects took down 66.2%, a fairly standard ratio, so there wasn’t a total buyer’s strike from the investor class. With directs taking a somewhat below-average 16%, this left dealers with a higher-than-usual 17.9%.

The 10Y yield broke above its pre-payrolls levels...

...and the surge in yields sent stocks lower, erasing most (or all for The Dow and Small Caps) of the overnight dovish-BoJ gains...

Needless to say, as Bloomberg's Cameron Crise noted, the apparent revulsion for paper below 4% is not bullish, and raises the question of whether bond operators will be happy digesting tomorrow’s $25 billion 30-year sale.

Not helping matters were comments from JPMorgan Chairman and CEO Jamie Dimon, who told CNBC that he was "skeptical that inflation will get back to 2%," adding that a 50bps cut by The Fed "doesn't matter as much as people think."