Bond Market Update

Auction Reaction

• U.S. Treasuries have spent the past couple hours in a slow retreat from their morning highs with the long end feeling some additional pressure after the U.S. Treasury's $16 bln 20-yr bond auction, which met soft demand. The sale drew a high yield of 4.830%, which tailed the when-issued yield by a basis point, while the bid-to-cover ratio (2.43x vs 2.60x average) and indirect takedown (63.0% vs 69.9% average) were below average.
• Yield Check:
  • 2-yr: -1 bp to 4.29%
  • 3-yr: -1 bp to 4.31%
  • 5-yr: UNCH at 4.40%
  • 10-yr: +2 bps to 4.56%
  • 30-yr: +2 bps to 4.79%