Bond Market Update

Auction Reaction

• U.S. Treasuries trade just below their best levels of the day, having seen some light recent pressure after the U.S. Treasury followed Monday's solid 3-yr note offering with a weak sale of $42 bln in 10-yr notes. The 10-yr note auction drew a high yield of 4.074%, which tailed the when-issued yield by 0.6 basis points while the bid-to-cover ratio (2.43x vs 2.56x average) and indirect takedown (67.0% vs 70.1% average) were below average.
• Yield Check:
  • 2-yr: -3 bps to 3.56%
  • 3-yr: -5 bps to 3.55%
  • 5-yr: -6 bps to 3.66%
  • 10-yr: -6 bps to 4.06%
  • 30-yr: -6 bps to 4.66%