Bond Market Update

Auction Reaction

• Longer-dated Treasuries have risen toward their morning highs after the just-completed $39 bln 10-yr note reopening met strong demand following yesterday's stellar 3-yr note sale. Treasuries drifted just below their opening levels prior to the auction after bouncing off their intraday lows that were reached around 11:00 ET. The market's recent bid appeared after the U.S. Treasury reopened 10-yr notes at a high yield of 4.276%, which stopped through the when-issued yield by a basis point while the bid-to-cover ratio (2.58x vs 2.52x average) and indirect takedown (67.6% vs 66.9%) were just above average. Thanks to the post-auction bid, yields on the 10-yr note and the 30-yr bond are now within a basis point of their lows from Monday.
• Yield Check:
  • 2-yr: -1 bp to 4.62%
  • 3-yr: -3 bps to 4.38%
  • 5-yr: -2 bps to 4.23%
  • 10-yr: -2 bps to 4.28%
  • 30-yr: -2 bps to 4.47%