Bond Market Update

Auction Reaction

• U.S. Treasuries have given back their slim morning gains after President Trump said that more attacks on Iran are being planned for later today. However, even with that revelation, the market has maintained a narrow trading range. The 10-yr yield is just off the top of today's three-basis point range in immediate reaction to the just completed $39 bln 10-yr note reopening. The sale met good demand with the high yield stopping through the when-issued yield by a tenth of a basis point. Meanwhile, the bid-to-cover ratio (2.59x vs 2.48x average) and indirect takedown (78.2% vs 68.8% average) were well above average.
• Yield Check:
  • 2-yr: +1 bp to 4.13%
  • 3-yr: UNCH at 4.18%
  • 5-yr: +1 bp to 4.26%
  • 10-yr: +1 bp to 4.54%
  • 30-yr: +1 bp to 5.02%