Bond Market Update

Auction Reaction

• U.S. Treasuries hover just below their best levels of the day that were reached in mid-morning trade. The market's advance is receiving some added support from the just-completed $44 bln 7-yr note sale, which met strong demand with the high yield (4.022%) stopping through the when-issued yield (4.024%) by 0.2 basis points. The bid-to-cover ratio (2.53x) was a bit below average (2.61x), but indirect takedown (76.7%) was well above average (69.9%), reflecting strong foreign interest.
• Yield Check:
  • 2-yr: -5 bps to 3.73%
  • 3-yr: -5 bps to 3.70%
  • 5-yr: -3 bps to 3.81%
  • 10-yr: -3 bps to 4.27%
  • 30-yr: -1 bp to 4.83%