Bond Market Update

2-Yr Auction Reaction

• Recent action saw the 10-yr note and shorter tenors return to their best levels of the session while the long has also climbed off its low, but it still trades below its opening mark. The U.S. Treasury just completed the first of today's two note auctions with a good result. The $69 bln 2-yr note sale drew a high yield of 4.315%, which stopped through the when-issued yield by half of a basis point. The bid-to-cover ratio (2.66x) was above average (2.61x) while indirect takedown (56.6%) was a bit below average (57.7%). The upcoming $70 bln 5-yr note sale will be completed at 13:00 ET.
• Yield Check:
  • 2-yr: -2 bps to 4.31%
  • 3-yr: -2 bps to 4.34%
  • 5-yr: -3 bps to 4.40%
  • 10-yr: -3 bps to 4.65%
  • 30-yr: -3 bps to 5.13%