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Bond bulls who enjoyed a rare rally in short-term Treasuries last week might not want to get too comfortable: The world’s biggest debt market is about to be inundated with an unprecedented wave of issuance.

The U.S. Treasury will probably auction about $294 billion of bills and notes this week, its largest slate of supply ever. The $30 billion two-year note sale is the biggest since 2014, and comes as the maturity posted just its fourth weekly gain in the last six months. The three- and six-month bill offerings remain at record sizes.

It’s a pivotal moment for traders gauging a Treasury market that appears to be range-bound after yields set multi-year highs in recent weeks. Jerome Powell’s first meeting as Federal Reserve chairman largely signaled continuity with Janet Yellen’s gradual path. That makes the market’s reception of swelling U.S. issuance a key to determining whether the bond selloff will resume.

“These larger auctions are more difficult to digest,” said Thomas Simons, a money-market economist at Jefferies. “But the auctions do OK when they have a concession. It’s even more necessary than it was in the past.”

While there’s evidence of weakening demand for U.S. auctions, an analysis of trading data is mixed at best about whether that portends further losses in Treasuries. But the threat of diminished interest and higher yields comes at a precarious time, with budget deficits climbing and the Fed paring its balance sheet.

Click here for more analysis of Treasury auction demand

U.S. financing needs are growing partly as a result of the tax overhaul. The Treasury is ramping up sales of shorter-term debt, like the maturities to be issued this week, while longer-dated obligations are growing at a slower pace.

The $35 billion of five-year notes and $29 billion of seven-year debt each match the largest offerings of the maturities since January 2016. In contrast to auctions in recent months, however, this week’s batch comes as the selloff has stalled.

The five-year sale last month yielded 2.658 percent and the seven-year 2.839 percent. The yields ended Friday at 2.6 percent and 2.74 percent, respectively. If the five-year sale yields less than in February’s auction, it would mark the first drop since August.

Of course, traders may build in a concession to take down the issuance, pushing yields at auction above their multi-year highs.

The results may help investors figure out whether last week’s rally was an aberration in a market otherwise dominated by rising short-term yields and a flattening curve.

What to Watch This Week

U.S. markets are closed on March 30 for the Good Friday holiday, and an early close is recommended for Thursday

The Fed’s preferred measure of inflation, the personal consumption expenditures index, is the highlight among U.S. economic indicators March 26: Chicago Fed national activity index; Dallas Fed manufacturing activity March 27: S&P CoreLogic Case-Shiller home price indexes; Richmond Fed manufacturing index; Conference Board consumer confidence surveys March 28: MBA mortgage applications; advance goods trade balance; wholesale inventories; GDP annualized QoQ and price index; personal consumption; retail inventories; core PCE QoQ; pending home sales March 29: Personal income and spending; PCE deflator and core PCE; jobless claims; MNI Chicago business barometer; Bloomberg consumer comfort; University of Michigan survey data

A handful of Fed speakers are on tap March 26: New York Fed’s William Dudley speaks on the future of financial regulation; Cleveland Fed’s Loretta Mester speaks on monetary policy; Fed Governor Randal Quarles speaks in Atlanta March 27: Atlanta Fed’s Raphael Bostic speaks at economic conference March 28: Bostic speaks to finance professionals in Atlanta March 29: Philadelphia Fed’s Patrick Harker speaks on the economic outlook

Huge slate of Treasury auctions, concentrated in shorter maturities March 26: $51 billion of three-month bills; $45 billion of six-month bills; $30 billion of two-year notes March 27: $24 billion of 52-week bills; $35 billion of five-year notes; four-week bill auction which will likely remain steady at $65 billion March 28: $15 billion of two-year floating-rate notes; $29 billion of seven-year notes



— With assistance by Alex Harris