Bond Market Update

Auction Reaction

• U.S. Treasuries remain in the red with longer tenors sliding back to their morning lows in recent trade. Intraday action has turned into a sideways drift at this year's lows with 10-yr note futures trading just 20 ticks above their low from late 2023. The market has not received much help from the just completed $13 bln 20-yr bond reopening, which met weak demand. The sale drew a high yield of 5.420%, which tailed the when-issued yield by two basis points. The bid-to-cover ratio (2.57x) was below average (2.64x) while indirect takedown (52.5%) was also weaker than average (65.1%).
• Yield Check:
  • 2-yr: +3 bps to 4.66%
  • 3-yr: +3 bps to 4.76%
  • 5-yr: +4 bps to 4.83%
  • 10-yr: +5 bps to 5.01%
  • 30-yr: +5 bps to 5.38%