BONDS: Swiss - Bund Spread Widening Drivers Could Fade From Here

Tsy futures remain weaker but off midmorning lows ahead of the $58B 3Y note auction (91282CND9) at 1300ET, WI is currently at 3.815%, 3.1bp cheap to last month's tail. Auction results will be available shortly after the competitive auctions closes at 1300ET.

• April auction recap: Treasury futures near lows after $58B 3Y note auction (91282CMW8) tails 2.4bp tail, drawing 3.784% high yield vs. 3.760% WI; 2.47x bid-to-cover vs. 2.70x prior.
• Peripheral stats see indirect take-up climb to 73.03% vs. 62.5% prior; direct bidder take-up 6.24% from 26.0% prior; primary dealer take-up 20.73% vs. 11.5% prior.

• Newswires continuing to pick up on headlines from Treasury Secretary Bessent who emphasises that China is the biggest piece of Trump's trade puzzle. Bessent states he is not going to talk about the Fed, and that the administration are trying to create the best environment for stable rates.
• “IF WE CAN TAKE AWAY THE CREDIT RISK OF THE U.S. GOVERNMENT, INTEREST RATES WILL COME DOWN”
• “SAYS WE WANT TO BRING DOWN FEDERAL DEFICIT BY MAYBE 1% PER YEAR” (Reuters)

• US TSY 13W BILL AUCTION: HIGH 4.220%(ALLOT 49.78%)
• US TSY 13W BILL AUCTION: DEALERS TAKE 37.27% OF COMPETITIVES
• US TSY 13W BILL AUCTION: DIRECTS TAKE 4.63% OF COMPETITIVES
• US TSY 13W BILL AUCTION: INDIRECTS TAKE 58.10% OF COMPETITIVES
• US TSY 13W BILL AUCTION: BID/CVR 2.74