Bond Market Update

Auction Reaction

• U.S. Treasuries have continued their rebound off morning lows with longer tenors turning positive in recent trade, thanks in part to a strong $22 bln 30-yr bond reopening. The just-completed sale drew a high yield of 4.913%, which stopped through the when-issued yield by 0.7 basis points while the bid-to-cover ratio (2.52x) was comfortably above average (2.42x). However, indirect takedown (66.6%) was a bit below the average (67.1%) seen at the previous 12 auctions. The 30-yr yield is now four basis points below its morning high, which marked the highest level since early November.
• Yield Check:
  • 2-yr: -2 bps to 4.28%
  • 3-yr: -1 bp to 4.35%
  • 5-yr: -1 bp to 4.45%
  • 10-yr: -1 bp to 4.67%
  • 30-yr: -1 bp to 4.90%