Bond Market Update

Auction Reaction

• U.S. Treasuries have continued their rebound off opening lows, reaching their best levels of the day during the past hour. The market is holding just below highs after the U.S. Treasury sold $69 bln in 2-yr notes to solid demand. The sale drew a high yield of 3.984%, which stopped through the when-issued yield by 0.3 basis points while the bid-to-cover ratio (2.66x vs 2.65x average) and indirect takedown (75.8% vs 69.3% average) were above average.
• Yield Check:
  • 2-yr: -3 bps to 4.00%
  • 3-yr: -4 bps to 3.98%
  • 5-yr: -4 bps to 4.06%
  • 10-yr: -3 bps to 4.30%
  • 30-yr: -1 bp to 4.65%