U.S. Treasury market blitzed with selling

There's some interesting market action in the Treasury arena today. The long bond futures are getting blitzed, with a price decline of 1 2/32 at last check. Moreover, the yield on the 10-year note is once again testing the 3% area (a gain of about 10 basis points on the day).

The immediate catalyst appears to be the slightly worse-than-expected auction of a record $35 billion in 5-year Treasury Notes. They went off at a yield of 1.94%, compared with pre-auction expectations for a reading of 1.92%, according to Bloomberg. But the bigger-picture issues (in my humble opinion) remain the flood of supply hitting the market, the exploding budget deficit, and the trashing of the Fed's balance sheet, among other things.