Bond Market Update

Auction Reaction

• U.S. Treasuries remain trapped in a razor-thin range near their unchanged levels. The Thursday affair has largely been a snoozer, and while the market attempted to make a sustained move into the green about two hours ago, it quickly found resistance, returning all tenors back to little changed. The past few minutes saw a dip into the red, just ahead of the U.S. Treasury's $44 bln 7-yr note auction, which was right on the screws, drawing a high yield of 4.512%. The bid-to-cover ratio (2.50x) was just above average (2.48x) while indirect takedown (60.8% vs 70.1% average) made for the only soft spot.
• Yield Check:
  • 2-yr: UNCH at 4.22%
  • 3-yr: -1 bp to 4.28%
  • 5-yr: UNCH at 4.38%
  • 10-yr: UNCH at 4.66%
  • 30-yr: UNCH at 5.19%