Bond Market Update

Auction Reaction

• U.S. Treasuries have seen some recent impulse buying in reaction to today's $58 bln 3-yr note auction, which met strong demand. The sale drew a high yield of 4.399%, which stopped through the when-issued yield by 0.8 bps while the bid-to-cover ratio (2.67x vs 2.63x average) and indirect takedown (64.0% vs 63.8% average) were just above average. The post-auction uptick has lifted the 5-yr note just above its opening level while longer tenors remain behind, trading just above session lows. Equities hold slim gains with the S&P 500 (+0.3%) looking to end the day at a fresh record closing high.
• Yield Check:
  • 2-yr: +1 bp to 4.63%
  • 3-yr: +1 bp to 4.41%
  • 5-yr: +3 bps to 4.25%
  • 10-yr: +4 bps to 4.31%
  • 30-yr: +5 bps to 4.50%