Bond Market Update

Auction Reaction

• Longer-dated Treasuries continue holding onto the bulk of today's gains while the 2-yr note trades on its low after giving back most of its opening advance. The market has seen some volatility today, but Treasuries are doing a good job defending their gains with the latest measure of support coming from a strong finish to this week's note auction slate. The just completed $44 bln 7-yr note sale drew a high yield of 4.162%, which stopped through the when-issued yield by 0.4 basis points, while the bid-to-cover ratio (2.64x vs 2.54x average) and indirect takedown (74.4% vs 68.2% average) were well above average.
• Yield Check:
  • 2-yr: UNCH at 4.42%
  • 3-yr: -1 bp to 4.24%
  • 5-yr: -4 bps to 4.12%
  • 10-yr: -5 bps to 4.24%
  • 30-yr: -7 bps to 4.48%