Bond Market Update

Auction Reaction

• U.S. Treasuries hover just below their best levels of the session after adding to their initial gains. The market is holding near rebound highs even though the just-completed $25 bln 30-yr bond auction met soft demand. The sale drew a high yield of 4.748%, which tailed the when-issued yield by 1.2 basis points while the bid-to-cover ratio (2.33x vs 2.44x average) and indirect takedown (65.1% vs 67.0% average) were below average. The 30-yr bond sale caps this week's unimpressive slate of note and bond offerings.
• Yield Check:
  • 2-yr: -6 bps to 4.31%
  • 3-yr: -7 bps to 4.33%
  • 5-yr: -9 bps to 4.39%
  • 10-yr: -10 bps to 4.54%
  • 30-yr: -9 bps to 4.75%