Bond Market Update

5-Yr Note Auction Reaction

• U.S. Treasuries have returned to their opening levels with the 5-yr note rising past its starting mark in reaction to the just-completed $70 bln 5-yr note sale, which met stronger demand than the $69 bln 2-yr note offering 90 minutes ago. The 5-yr offering drew a high yield of 4.330%, which stopped through the when-issued yield by 0.6 basis points while the bid-to-cover ratio (2.40x vs 2.38x) was a bit above average. Indirect takedown (62.8% vs 67.5%), however, was a touch light relative to the prior 12-auction average.
• Yield Check:
  • 2-yr: -8 bps to 4.19%
  • 3-yr: -10 bps to 4.23%
  • 5-yr: -11 bps to 4.32%
  • 10-yr: -10 bps to 4.53%
  • 30-yr: -8 bps to 4.77%