Bond Market Update

Auction Reaction

• U.S. Treasuries have pulled back from their morning highs, giving back roughly half of their gains. The intraday pullback has developed in steady fashion while equities have sustained their big opening gains, remaining not far from their starting levels. Treasuries remain at their intraday lows in immediate reaction to today's $39 bln 10-yr note reopening, which met weak demand. The sale drew a high yield of 4.282%, tailing the when-issued yield by 0.2 basis points, while the bid-to-cover ratio (2.43x vs 2.52x) and indirect takedown (65.3% vs 71.3% average) were below average.
• Yield Check:
  • 2-yr: -6 bps to 3.77%
  • 3-yr: -7 bps to 3.79%
  • 5-yr: -7 bps to 3.90%
  • 10-yr: -6 bps to 4.28%
  • 30-yr: -4 bps to 4.88%