Bond Market Update

Auction Reaction

• U.S. Treasuries continue trading in the red with the 2-yr note showing relative weakness as crude oil continues its push past $90/bbl while the long bond outperforms, remaining near its starting level. The long bond's outperformance received some recent assistance from today's $22 bln 30-yr bond reopening, which met strong demand. The reopening drew a high yield of 4.871%, which stopped through the when-issued yield by 0.7 basis points while the bid-to-cover ratio (2.45x vs 2.39x average) and indirect takedown (63.4% vs 63.8% average) were above average.
• Yield Check:
  • 2-yr: +8 bps to 3.71%
  • 3-yr: +7 bps to 3.72%
  • 5-yr: +5 bps to 3.84%
  • 10-yr: +3 bps to 4.24%
  • 30-yr: +1 bp to 4.87%