Bond Market Update

Auction Reaction

• U.S. Treasuries have slipped out of their opening range during the past 30 minutes, lifting yields to fresh highs for the day alongside some upward pressure on the price of oil. The market is staying near lows in immediate reaction to today's $69 bln 2-yr note sale, which met decent demand. The auction drew a high yield of 3.812%, which tailed the when-issued yield by a tenth of a basis point while the bid-to-cover ratio (2.65x) was above average (2.59x). Indirect takedown (56.5%), however, was a bit light relative to the prior 12-auction average (57.9%). The U.S. Treasury will also sell 5-yr notes at 13:00 ET as it looks to complete this week's auction slate ahead of Wednesday's FOMC Decision.
• Yield Check:
  • 2-yr: +3 bps to 3.81%
  • 3-yr: +3 bps to 3.83%
  • 5-yr: +3 bps to 3.95%
  • 10-yr: +2 bps to 4.33%
  • 30-yr: +3 bps to 4.94%