Treasury yields are spiking notably today with 30Y back above 3.00% and 10Y yields at 2.83% are near 3-week highs and along with the dismal indirect bids in the latest 3Y and 10Y auctions (i.e. foreigners not buying), some are suggesting today's move could be the start of China's move to unwind its Treasury holdings.

10Y yields up around 5bps…

30Y yields also up around 5bps, testing the recent down-channel…

But we also note that this could be RP funds bring bonds and stocks back together again…

BMO favors coming out of the auction process long with an even higher conviction that the yield curve will grind flatter from here. After all, we have yet to see any meaningful capitulation of the massive short-base in the longer-end of the Treasury market.

Additionally, BMO says that unless we see gains from a diverse variety of sources, we'll be wary of betting on CPI to keep performing and will look to sell 10-year breakevens over 2.15%.