Bond Market Update

Auction Reaction

• U.S. Treasuries have slid to fresh lows after spending the bulk of the day in a sideways range. The recent retreat to lows took place after the U.S. Treasury completed this week's note and bond auction slate with a poor $25 bln 30-yr bond sale. The auction drew a high yield of 4.813%, which tailed the when-issued yield by 2.1 basis points. The bid-to-cover ratio (2.27x) was below average (2.42x) while indirect takedown (59.5% vs 65.1% average) was also shy of average, making for a continuation of this week's trend.
• Yield Check:
  • 2-yr: +3 bps to 3.73%
  • 3-yr: +3 bps to 3.69%
  • 5-yr: +3 bps to 3.79%
  • 10-yr: +3 bps to 4.25%
  • 30-yr: +1 bp to 4.82%