Today will be a big test of real money demand for 10-year US notes. Treasuries will sell $39 billion in a new issue at 1:00 PM ET with results a few minutes later.

Yields are up 8.1 bps today at 4.69%, the highest since April. A weak result would put April’s high of 4.74% under pressure, while anything above 4.61% would be the highest in more than a decade. Yesterday, three-year note sales weakened by 1.2 basis points and this led to significantly higher yields.

The biggest driver today was a pair of strong US jobs and ISM services reports, which also included a jump in the ‘prices paid’ component. The market has just 35 basis points in US easing this year, with no full cuts until July.

The other big question is what is happening on the fiscal side in the US. Trump appears to be pressuring Congress to raise the debt limit and run big deficits to pay for the extension (and expansion) of his 2017 tax cuts. The president-elect will be speaking at Mar-a-Lago soon.

Here’s what BMO says ahead of the sale:

“The main risk associated with Trump’s initial actions in the White House at the moment is fueling a significant degree of inflationary fear. This is not to say that the background of rising deficit concerns, a resilient aggregate demand profile, stable inflation and the fact that New Year’s optimism is currently setting the agenda. we are biased towards the tail at 1pm EST.“