Bond Market Update

Treasury Auction Results

• The 30-yr bond auction saw a high yield of 5.216% slightly tail the when-issued yield of 5.212%. Overall, this was an average auction. The 2.39 bid-to-cover ratio was right in-line with the prior 12 auction average, and there wasn't a lot of variance between the indirect bid and direct bid versus the prior averages. Not surprisingly, the market's direct response to this auction has been fairly muted. Yields had been backing up from their best levels seen earlier prior to the auction, with some intraday volatility in oil prices quieting the post-PPI advance.
• $25 bln 30-year Treasury bond auction:
  • Auction results:
    • High yield: 5.216% (When-Issued: 5.212%)
    • Bid-to-cover: 2.39
    • Indirect bid: 66.8%
    • Direct bid: 21.6%
  • Average results of previous 12 auctions:
    • High yield: 4.843%
    • Bid-to-cover: 2.39
    • Indirect bid: 65.9%
    • Direct bid: 22.7%

• Yield check:
  • 2-yr: -5 bps to 4.20
  • 3-yr: -5 bps to 4.22%
  • 5-yr: -5 bps to 4.32%
  • 10-yr: -3 bps to 4.65%
  • 30-yr: -3 bps to 5.22%