Bond Market Update

Auction Reaction

• U.S. Treasuries trade on their highs, having reached their best levels after today's strong $58 bln 3-yr note sale. Treasuries began rising off their opening lows in early action, spending morning trade in a steady rise. The advance has received added support from the just-completed 3-yr note sale, which produced a stop-through of nearly one basis point with the bid-to-cover ratio (2.66x) coming in above the prior 12-auction average (2.59%). Meanwhile, indirect takedown (62.7%) was a touch below average (64.5%).
• Yield Check:
  • 2-yr: -4 bps to 3.56%
  • 3-yr: -4 bps to 3.57%
  • 5-yr: -5 bps to 3.70%
  • 10-yr: -5 bps to 4.12%
  • 30-yr: -4 bps to 4.71%