Bond Market Update

Auction Reaction

• Longer-dated Treasuries hover just below their rebound highs while the short end remains behind with the 2-yr note trading just above its low. The entire complex has held its ground in reaction to today's first auction, which was just completed. The $58 bln 3-yr note sale met good demand, as the high yield stopped through the when-issued yield by a tenth of a basis point while the bid-to-cover ratio (2.65x) was just above average (2.63x). Indirect takedown (56.5%) made for the only blemish, coming in below average (70.6%). The U.S. Treasury will sell $39 bln in 10-yr notes in just under 90 minutes.
• Yield Check:
  • 2-yr: +1 bp to 3.55%
  • 3-yr: UNCH at 3.60%
  • 5-yr: +1 bp to 3.77%
  • 10-yr: +2 bps to 4.19%
  • 30-yr: +2 bps to 4.84%