Bond Market Update

Auction Reaction

• U.S. Treasuries hover a bit above their opening levels with the short end hanging onto a slim gain. Overall, today's session has seen sideways action with the market showing almost no immediate reaction to the U.S. Treasury's $44 bln 7-yr note offering, which met weak demand, capping this week's underwhelming slate of note offerings. Today's sale drew a high yield of 4.233%, which tailed the when-issued yield by 0.6 basis points while the bid-to-cover ratio (2.53x vs 2.59x average) and indirect takedown (61.2% vs 71.0% average) were below average.
• Yield Check:
  • 2-yr: -1 bp to 4.00%
  • 3-yr: UNCH at 4.00%
  • 5-yr: +2 bps to 4.11%
  • 10-yr: +4 bps to 4.37%
  • 30-yr: +5 bps to 4.73%