Bond Market Update

Auction Reaction

• Longer-dated Treasuries hover just above their lows that were notched in recent action while shorter tenors trade a bit above lows that were set about two hours ago. The market has shown a limited immediate reaction to today's $69 bln 2-yr note sale, which met stellar demand. The sale drew a high yield of 4.335%, which stopped through the when-issued yield by a tenth of a basis point while the bid-to-cover ratio (2.73x vs 2.63x average) and indirect takedown (82.1% vs 65.9% average) were comfortably above average. The U.S. Treasury will follow this sale with a $70 bln 5-yr note offering tomorrow at 11:30 ET.
• Yield Check:
  • 2-yr: +2 bps to 4.32%
  • 3-yr: +3 bps to 4.35%
  • 5-yr: +5 bps to 4.43%
  • 10-yr: +5 bps to 4.57%
  • 30-yr: +5 bps to 4.77%