Bond Market Update

Auction Reaction

• U.S. Treasuries trade near their best levels of the day, looking to sustain a bounce that is pressuring yields off levels not seen since mid-2025. The belly has shown some relative strength since the start, though the 5-yr note has narrowed its lead after today's $70 bln 5-yr note auction, which met weak demand. The sale drew a high yield of 3.980%, which tailed the when-issued yield by nearly 1.5 basis points while the bid-to-cover ratio (2.29x vs 2.39x average) and indirect takedown (61.9% vs 64.6% average) were below average, making for the second poor auction of the week.
• Yield Check:
  • 2-yr: -5 bps to 3.88%
  • 3-yr: -6 bps to 3.88%
  • 5-yr: -6 bps to 3.97%
  • 10-yr: -6 bps to 4.33%
  • 30-yr: -4 bps to 4.90%