treasury auctions can nudge the dollar for an hour

[Shadow Trader]

Auctions of government bonds happen at set times, and a weak one, where demand is thin and the yield comes in above where the market expected, can push yields up in a short window. That sometimes spills into the dollar, mostly against low-yielders like the yen.

The measure usually quoted is the "tail": the gap between the auction's yield and the yield trading just before it. A big tail means buyers wanted extra compensation. A tiny one, or a negative one, suggests strong demand.

The effect on FX is small and unreliable. Most auctions pass without a ripple, and plenty of moves blamed on them were already underway. Still, the 10-year and 30-year sales stand out because longer yields feed straight into USD/JPY, and the result is released within seconds of the 13:00 New York bid deadline.

A reasonable way to test the idea is to mark a handful of auction times on a chart and compare the five-minute range afterwards with an ordinary day. No need to trust a story. Ten or twenty samples will show whether anything is there.

Does anyone here watch the 10-year and 30-year auctions around 13:00 New York time and notice anything on USD/JPY? Or does it vanish once the test is run?