Bond Market Update

Auction Reaction

• U.S. Treasuries remain just below their highs that were reached about two hours ago with yields on course to settle at fresh lows for the year. Treasuries are holding steady in the wake of the just-completed $70 bln 5-yr note sale, which met strong demand. The auction drew a high yield of 4.123%, which stopped through the when-issued yield by a basis point while the bid-to-cover ratio (2.42x vs 2.39x average) and indirect takedown (74.9% vs 67.7% average) were above average.
• Yield Check:
  • 2-yr: -8 bps to 4.09%
  • 3-yr: -8 bps to 4.09%
  • 5-yr: -9 bps to 4.14%
  • 10-yr: -9 bps to 4.31%
  • 30-yr: -8 bps to 4.57%