Bond Market Update

Auction Reaction

• U.S. Treasuries hover just below highs that were reached in response to mid-morning reports about meaningful progress in U.S.-Iran negotiations. Treasuries attempted a late morning pullback from highs, but the past hour has seen some renewed buying that has returned the complex toward today's highs. The U.S. Treasury just completed this week's note auction slate with a solid sale of $44 bln in 7-yr notes. The offering drew a high yield of 4.290%, which stopped through the when-issued yield by a tenth of a basis point while the bid-to-cover ratio (2.52x) was right in line with average. Indirect takedown (78.4%) was above average (64.7%), reflecting increased interest from foreign investors and central banks.
• Yield Check:
  • 2-yr: -1 bp to 4.02%
  • 3-yr: -2 bps to 4.06%
  • 5-yr: -2 bps to 4.16%
  • 10-yr: -3 bps to 4.45%
  • 30-yr: -3 bps to 4.99%