Bond Market Update

Auction Reaction

• U.S. Treasuries have inched up off their lows in the wake of a strong $13 bln 20-yr bond reopening. Treasuries added to their starting losses in late morning trade, but recent action has seen an uptick off lows after the U.S. Treasury reopened $13 bln in 20-yr bonds. The sale drew a high yield of 4.935%, which stopped through the when-issued yield by 1.6 basis points with an above-average bid-to-cover ratio (2.79x vs 2.57x average) while indirect takedown (67.4% vs 68.4% average) was a bit shy of average.
• Yield Check:
  • 2-yr: +4 bps to 3.87%
  • 3-yr: +4 bps to 3.82%
  • 5-yr: +5 bps to 3.92%
  • 10-yr: +5 bps to 4.38%
  • 30-yr: +5 bps to 4.95%