Bond Market Update

Auction Reaction

• U.S. Treasuries trade modestly higher with shorter tenors just below their post-CPI highs while the long bond hovers near the midpoint of today's range. The market has seen some more buying in immediate reaction to a $22 bln 30-yr bond reopening, which met strong demand. The sale drew a high yield of 4.825%, which stopped through the when-issued yield by 0.8 basis points, while the bid-to-cover ratio (2.42x) exceeded the prior 12-auction average (2.37x). Indirect takedown (66.8%) was also above average (63.5%), making for a strong finish to this week's note and bond auction slate.
• Yield Check:
  • 2-yr: -3 bps to 3.52%
  • 3-yr: -2 bps to 3.58%
  • 5-yr: -3 bps to 3.74%
  • 10-yr: -2 bps to 4.17%
  • 30-yr: -1 bp to 4.83%