Bond Market Update

Treasury Auction Results

• The 10-yr note auction saw the high yield of 4.683% pretty much stopping on the screws with the 4.682% when-issued yield. This was a decent auction with good dollar demand, evidenced by a 2.53 bid-to-cover ratio that exceeded the prior 12-auction average. There was solid demand from foreign buyers as well. The market's reaction to the auction results has been relatively muted. The front end continues to lead the back end of the curve in today's trading.
• $42 bln 10-year Treasury note auction:
  • Auction results:
    • High yield: 4.683% (When-Issued: 4.682%)
    • Bid-to-cover: 2.53
    • Indirect bid: 76.7%
    • Direct bid: 14.7%
  • Average results of previous 12 auctions:
    • High yield: 4.224%
    • Bid-to-cover: 2.49
    • Indirect bid: 69.6%
    • Direct bid: 20.4%

• Yield check:
  • 2-yr: -3 bps to 4.19%
  • 3-yr: -2 bps to 4.26%
  • 5-yr: -3 bps to 4.36%
  • 10-yr: -1 bp to 4.67%
  • 30-yr: -1 bp to 5.23%