Bond Market Update

2-yr Note Auction Reaction

• U.S. Treasuries have seen an extension of their early losses as the U.S. Treasury completed the first of today's two note auctions. The $69 bln 2-yr note sale met weak demand, reflecting skittishness given the ongoing run up in yields. The high yield tailed the when-issued yield by 0.8 basis points while the bid-to-cover ratio (2.50x vs 2.62x) and indirect takedown (58.2% vs 65.0%) were below average. This sale will be followed by a $70 bln 5-yr note offering at 13:00 ET.
• Yield Check:
  • 2-yr: +4 bps to 4.14%
  • 3-yr: +4 bps to 4.08%
  • 5-yr: +5 bps to 4.10%
  • 10-yr: +4 bps to 4.28%
  • 30-yr: +3 bps to 4.53%