Bond Market Update

Auction Reaction

• U.S. Treasuries are approaching their opening levels, having seen an acceleration of their bounce off morning lows after today's strong $13 bln 20-yr bond reopening. The just completed sale drew a high yield of 4.506%, which stopped through the when-issued yield by 1.2 basis points while the bid-to-cover ratio (2.73x) was comfortably above average (2.60x). Indirect takedown (63.6%) was a bit below average (66.6%) bit direct bidders picked up the slack. With the post-auction bid, Treasuries are now threatening their opening highs.
• Yield Check:
  • 2-yr: -1 bp to 3.45%
  • 3-yr: -1 bp to 3.45%
  • 5-yr: -1 bp to 3.56%
  • 10-yr: -1 bp to 3.96%
  • 30-yr: -1 bp to 4.54%