Bond Market Update

Auction Reaction

• U.S. Treasuries have continued today's rebound off opening lows with a recent extension to fresh highs that followed the completion of an impressive $39 bln 10-yr note reopening. The stellar sale drew a high yield of 4.033%, which stopped through the when-issued yield by 1.3 basis points while the bid-to-cover ratio (2.65x vs 2.55x average) and indirect takedown (83.1% vs 69.5% average) were well above average. This follows yesterday's strong 3-yr note offering with the market encouraged by renewed strength in foreign demand.
• Yield Check:
  • 2-yr: -3 bp to 3.53%
  • 3-yr: -2 bps to 3.48%
  • 5-yr: -3 bps to 3.58%
  • 10-yr: -4 bps to 4.03%
  • 30-yr: -4 bps to 4.68%