Bond Market Update

Auction Reaction

• U.S. Treasuries continue trading near their lows, having faced some light selling in reaction to today's $42 bln 10-yr note sale, which met weak demand. The just completed sale drew a high yield of 4.255%, which tailed the when-issued yield by 1.1 basis points. The bid-to-cover ratio (2.35x) was a bit below average (2.57x) while indirect takedown (64.2%) was also below the average seen at the previous 12 auctions (69.7%). The U.S. Treasury will complete this week's underwhelming series of note and bond offerings with a $25 bln 30-yr bond auction at 13:00 ET.
• Yield Check:
  • 2-yr: +1 bp to 3.73%
  • 3-yr: UNCH at 3.68%
  • 5-yr: +3 bps to 3.79%
  • 10-yr: +4 bps to 4.24%
  • 30-yr: +6 bps to 4.83%