Bond Market Update

Auction Reaction

• Longer-dated Treasuries hold slim gains, trading just below their best levels of the day while the 2-yr note remains behind, sitting on its flat line. The Treasury market has held its ground in reaction to the just-completed $13 bln 20-yr bond reopening, which met good demand. The sale drew a high yield of 4.466%, which stopped through the when-issued yield by 0.1 bps while the bid-to-cover ratio (2.68x vs 2.62x average) and indirect takedown (77.2% vs 69.5% average) were above average. Longer tenors remain at their best levels of the month even though the Atlanta Fed raised its GDPNow forecast for Q2 GDP to 2.7% from 2.5%, representing the third consecutive increase.
• Yield Check:
  • 2-yr: UNCH at 4.44%
  • 3-yr: UNCH at 4.21%
  • 5-yr: -1 bp to 4.08%
  • 10-yr: -1 bp to 4.16%
  • 30-yr: -1 bp to 4.37%