Bond Market Update

Auction Reaction

• Shorter-dated Treasuries continue holding a good chunk of their post-NFP losses while the long end has shown resilience, briefly lifting the 30-yr bond into positive territory during the past hour. The intraday bounce has run into some resistance after the U.S. Treasury's $42 bln 10-yr note sale met weak demand. The auction drew a high yield of 4.177%, which tailed the when-issued yield by 1.4 bps. The bid-to-cover ratio (2.39x) was a bit below average (2.54x), which was also the case with indirect takedown (64.5% vs 71.2% average).
• Yield Check:
  • 2-yr: +5 bps to 3.50%
  • 3-yr: +4 bps to 3.56%
  • 5-yr: +4 bps to 3.74%
  • 10-yr: +2 bps to 4.17%
  • 30-yr: +2 bps to 4.81%