Bond Market Update

Treasury Auction Results

• $58 bln 3-year Treasury note auction:
  • Auction results:
    • High yield: 4.332% (When-Issued: 4.320%)
    • Bid-to-cover: 2.62
    • Indirect bid: 61.0%
    • Direct bid: 19.7%
  • Average results of previous 12 auctions:
    • High yield: 4.178%
    • Bid-to-cover: 2.58
    • Indirect bid: 65.8%
    • Direct bid: 17.8%
• The 3-yr note auction didn't impress as the high yield of 4.332% tailed the when-issued yield by 1.2 basis points. Overall dollar demand was pretty solid, as seen in a 2.62 bid-to-cover ratio; however, there was less involvement from indirect bidders today than in previous auctions. Yields across the curve ticked higher following the auction results.

• Yield check:
  • 2-yr: -1 bp to 4.27%
  • 3-yr: unch at 4.32%
  • 5-yr: +2 bps to 4.43%
  • 10-yr: +3 bps to 4.63%
  • 30-yr: +4 bps to 4.84%