Bond Market Update

Auction Reaction

• U.S. Treasuries have risen off their lows in reaction to the just-completed $70 bln 5-yr note sale, which met strong demand. The auction drew a high yield of 4.478%, which stopped through the when-issued yield by 0.2 basis points while the bid-to-cover ratio (2.40x vs 2.39x average) was just above average and indirect takedown (67.3% vs 67.8% average) was a touch shy of the prior 12-auction average. Still, the post-auction advance has returned the 5-yr note to its opening level while the long bond has climbed above its starting mark.
• Yield Check:
  • 2-yr: -1 bp to 4.34%
  • 3-yr: +1 bp to 4.38%
  • 5-yr: +2 bps to 4.46%
  • 10-yr: +2 bps to 4.62%
  • 30-yr: +2 bps to 4.80%