Bond Market Update

Auction Reaction

• U.S. Treasuries have continued navigating a narrow intraday range, though the long end has shown a continuation of its early strength, which is keeping the 30-yr yield just a couple basis points above its low from last week. Up front, the 2-yr note remains near its starting level, holding steady after today's $69 bln 2-yr note sale, which met decent demand, though there were some soft spots. The high yield tailed the when-issued yield by a tenth of a basis point while indirect takedown (55.9%) was below average (61.7%). The bid-to-cover ratio (2.63x); however, was better than average (2.61x). The U.S. Treasury will sell $70 bln in 5-yr notes tomorrow.
• Yield Check:
  • 2-yr: +2 bps to 3.46%
  • 3-yr: +1 bp to 3.46%
  • 5-yr: +2 bps to 3.60%
  • 10-yr: UNCH at 4.03%
  • 30-yr: -1 bp to 4.69%