Bond Market Update

Auction Reaction

• U.S. Treasuries hover just above session lows that were reached about an hour ago with the long end showing relative weakness while shorter tenors are little changed. The Treasury complex has held its ground through the recent completion of today's $58 bln 3-yr note auction, which met soft demand. The sale drew a high yield of 3.908%, which tailed the when-issued yield by 0.6 basis points, while the bid-to-cover ratio (2.70x vs 2.59x average) was above average and indirect takedown (62.5% vs 66.1% average) was below average. Today's auction will be followed by a $39 bln 10-yr note reopening tomorrow and a $22 bln 30-yr bond reopening on Thursday.
• Yield Check:
  • 2-yr: -1 bp to 3.89%
  • 3-yr: UNCH at 3.90%
  • 5-yr: +1 bp to 3.99%
  • 10-yr: +3 bps to 4.24%
  • 30-yr: +4 bps to 4.57%