Bond Market Update

Auction Reaction

• U.S. Treasuries continue trading just above their lowest levels of the day, holding modest losses across all tenors. Treasuries reversed from their highs during the first hour of action while recent trade has seen a slight uptick in reaction to the just-completed $69 bln 2-yr note sale, which met solid demand. The auction priced right on the screws, drawing a high yield of 4.706%, while the bid-to-cover ratio (2.75x vs 2.66x average) and indirect takedown (65.6% vs 63.8%) were comfortably above average.
• Yield Check:
  • 2-yr: +2 bps to 4.75%
  • 3-yr: +1 bp to 4.48%
  • 5-yr: +1 bp to 4.28%
  • 10-yr: UNCH at 4.25%
  • 30-yr: +1 bp to 4.39%