Bond Market Update

Auction Reaction

• U.S. Treasuries have continued trading in sideways fashion, leaving yields near their opening levels of the day. The market inched to lows in the late morning, but recent action has seen an uptick from the bottom of the day's range after the U.S. Treasury sold $44 bln in 7-yr notes to strong demand. The offering drew a high yield of 4.457%, which stopped through the when-issued yield by 0.9 basis points. The bid-to-cover ratio (2.64x) was above average (2.58x) while indirect takedown (67.1% vs 71.2% average) was on the light side of average.
• Yield Check:
  • 2-yr: +3 bps to 4.22%
  • 3-yr: +2 bps to 4.26%
  • 5-yr: +3 bps to 4.36%
  • 10-yr: +3 bps to 4.56%
  • 30-yr: +3 bps to 4.80%