Bond Market Update

Treasury Confirms Auction Plans

• U.S. Treasuries trade a touch below their starting levels after slipping out of the gate despite the release of an ADP Employment Change report for January (22,000; Briefing.com consensus 43,000) that was weaker than expected. Longer tenors have seen a bit more pressure in recent trade after the U.S. Treasury announced in its quarterly refunding statement that it will sell $125 bln in notes and bonds next week, aiming to raise $34.8 bln of new cash from private investors. This month's auctions will be upsized by $3 bln at the 10-, 20-, and 30-yr tenors before a return to levels seen at the end of Q4.
• Yield Check:
  • 2-yr: +1 bp to 3.58%
  • 3-yr: UNCH at 3.65%
  • 5-yr: +1 bp to 3.85%
  • 10-yr: +1 bp to 4.29%
  • 30-yr: +1 bp to 4.92%