Bond Market Update

Auction Reaction

• U.S. Treasuries trade at their best levels of the session after overcoming early weakness. The market spent the first two hours of action in a sideways range near session lows, but rallied alongside weakness in equities. Treasuries dipped from their highs in recent trade, responding to a poorly received $22 bln 30-yr bond reopening. The sale drew a high yield of 4.623%, which tailed the when issued yield by more than a basis point while the bid-to-cover ratio (2.37x vs 2.43x average) and indirect takedown (60.5% vs 66.5% average) were below average.
• Yield Check:
  • 2-yr: -3 bps to 3.96%
  • 3-yr: -4 bps to 3.95%
  • 5-yr: -4 bps to 4.04%
  • 10-yr: -3 bps to 4.29%
  • 30-yr: -2 bps to 4.62%