Bond Market Update

Auction Reaction

• Longer-dated Treasuries have inched above their opening levels while the 2-yr note has faced continued pressure, which has it trading on its session low. The 10-yr note and the long bond hover just below their rebound highs, having shown a limited reaction to the just-completed $13 bln 20-yr bond reopening, which met weak demand. The auction drew a high yield of 4.590%, which tailed the when-issued yield by 1.6 basis points while the bid-to-cover ratio (2.59x) was just below average (2.60x), as was indirect takedown (67.9% vs 70.4% average). Elsewhere, equities have faced some more pressure, which has sent the S&P 500 (-1.0%) to its lowest level in nearly two weeks.
• Yield Check:
  • 2-yr: +3 bps to 4.07%
  • 3-yr: +4 bps to 4.02%
  • 5-yr: +3 bps to 4.04%
  • 10-yr: +2 bps to 4.23%
  • 30-yr: +1 bp to 4.50%