Bond Market Update

Auction Reaction

• U.S. Treasuries have advanced over the past two hours with longer tenors bouncing off their early lows while the 5-yr note and shorter tenors have built on their starting gains. The entire complex pushed to fresh highs after the U.S. Treasury started this week's note auction slate with a solid $69 bln 2-yr note sale. The auction drew a high yield of 3.641%, which stopped through the when-issued yield by 1.5 basis points. The bid-to-cover ratio (2.69x) was above average (2.62x) while indirect takedown (57.1%) was well below average (67.5%) once again.
• Yield Check:
  • 2-yr: -5 bps to 3.68%
  • 3-yr: -5 bps to 3.63%
  • 5-yr: -4 bps to 3.74%
  • 10-yr: -2 bps to 4.26%
  • 30-yr: +2 bps to 4.91%