7yr Treasury auctions haven't been great for bonds in 2021. Every time we've had one, bonds have sold off. In fact, the late February example proved to be one of the biggest bearish motivations for rates of the entire up-trend (stretching all the way back to August 2020). For the first time since August, today's 7yr auction arrives amid momentum that's been "sideways to slightly stronger" for the past few weeks.
Will it make a difference? It didn't in January. Bonds had been rallying for more than 2 weeks at the time and reversed course on the day of the 7yr auction. The following iteration caused the biggest sell-off in more than a year (an astonishing thing to consider when it comes to a market event that rarely has a big impact).
So what's the deal with 7s all of the sudden? Why are they important now after not being important pretty much any time before 2021? Part of the issue is simply timing. It's likely that the February auction wouldn't have been nearly as big of a deal had it not been for aggressive Treasury selling in Japan heading into the country's fiscal year-end. This also helps explain away some of the weakness in March although by that point in the month, Japan had already done the bulk of its Treasury selling.
To be sure, we are not expecting a February-style reaction today. Japan aside, that was a special time for bonds as traders were generally rushing to reposition for higher yields after months of covid-induced complacency and political uncertainty. Since then, bonds have reached an intermission of sorts and it may not be over just yet.