Watching the Direct Bids: Treasuries have been pressured all session, getting added weight midday awaiting the auction while watching commodities crumble and worrying over the 10-yr results. The 10-yr had stalled for a while near the 3.725% point and has now found 3.74% to also be magnetic. The curve has been held in check near 283 on the 2-10-yr yield spread. The previous $25 bln 10-yr auction saw did not go off too well, with the 3.692% draw, a 2.67 bid-to-cover and 33.2% indirect bidder take. The previous 10-auction averages of 2.77 and 40.3%. The direct bidders have been in play in the past several auctions with the previous 10-yr reopening saw a huge 17.3% take and last month's new offering getting a size 13%. Players are not especially impressed when the direct run high, with the larger take able to skew results if they step in aggressively and take the yield off. The market backed off to tag the highest yield since Feb 23, tagging 3.744% on the 10-yr, while the belly is leading the curve. The dollar was able to bounce off the 80.30 area on the index as gold and other commodities fell apart midsession. The euro has again been denied the 1.3680 level and is ticking near 1.3635 while also making a similar move off against the yen. The yen is holding near the 90.50 point on the buck, likely to get buffeted around once the auction rolls through. Players report that there was thinned action and a "very large" put buying in the gold not long before it fell apart, goosing it through technical support, but otherwise there is little except chatter over China pushing things around. Auction $21 bln reopened 10-yrs (correct)