U.S. Treasuries completed this week’s note auctions with a $39 bln 7-yr notes that met weak demand, though post-auction selling was limited. The auction followed yesterday’s 5-yr note and 2-yr note auctions. Longer-dated Treasuries reached highs while shorter tenors held steady just below their best levels of the day. The 30-yr yield past its low from last week to a level not seen since late September. Today’s sale drew a high yield of 4.399% (When-Issued: 4.378%), which drew a 2.1 bps … Continue reading “Weak Demand at 7-year Treasury Bond Auction with 2.1 bps Tail Completes Week’s Offerings”
Stronger Demand in 5-Year Treasury Auction Following Soft Earlier 2-Year Treasury Auction
U.S. Treasuries rallied to new highs after the completion of today’s $55 billion 5-yr note auction, which met much stronger demand than the $54 billion 2-yr note sale completed 90 minutes earlier. The 5-yr note sale drew a high yield of 4.420%, which stopped through the when-issued yield by 0.5 bps even though the bid-to-cover ratio (2.46x vs 2.51x average) and indirect takedown (65.5% vs 68.3% average) remained below average. Equities climbed off their lows with the Nasdaq extending its … Continue reading “Stronger Demand in 5-Year Treasury Auction Following Soft Earlier 2-Year Treasury Auction”
International Demand Lower in 2 Year Treasury Auction as Fresh Bond Supply Swamps Market
In another week of heavy supply, the 2-year $54 billion two-year notes auction kicked off this weeks’ auctions and saw dismal international demand of 57.4% versus a 12-month average of 62.9%. Domestic demand came in stronger than expectations 23.9% versus the 12-month average of 20.2% which helped the entire complex higher throughout the day with the front end overcoming the soft sale. The bid to cover was less than the 12-month average. The sale drew a high yield of 4.887%, … Continue reading “International Demand Lower in 2 Year Treasury Auction as Fresh Bond Supply Swamps Market”
Bond Traders Weekly Outlook: Bonds Eye New Supply, PCE Ahead
U.S. Treasuries closed the shortened week broadly lower. Treasuries followed Thanksgiving with a lower start that returned the 30-yr yield to little changed for the week while yields on shorter tenors were pushed above their closing levels from last week. The 2-yr note showed a five-basis point increase in yield for the week while the 10-yr yield rose three basis points since last Friday, pressuring the 2s10s spread to -48 bps from -46 bps at last week’s settlement. There is … Continue reading “Bond Traders Weekly Outlook: Bonds Eye New Supply, PCE Ahead”
Solid Demand at U.S. 20-year Treasury Bond Auction Supports Market Tone
The much-anticipated completion of today’s $16 billion 20-yr bond auction met solid demand. The sale drew a high yield of 4.780%, which stopped through the when-issued yield by a basis point while the bid-to-cover ratio (2.58x) was shy of average (2.66x) indirect takedown (74.0%) was comfortably above average (71.3%). The 5-yr note and longer tenors turned positive while shorter tenors rose off their lows but remain in negative territory. The desk gave an A- rating on the auction. Equities rose … Continue reading “Solid Demand at U.S. 20-year Treasury Bond Auction Supports Market Tone”
Bond Traders Weekly Outlook: Bonds Rally Gained Legs, 20 Year Ahead to Test Resolve
U.S. Treasuries saw a strong bid, which sent yields to fresh low for the month this week across the curve, pressuring yields to levels not seen since September. Eurozone’s final CPI report for October showed the seventh consecutive deceleration in the yr/yr rate to 2.9%. The 30-yr yield saw its lowest close since late September. Fed Governor Barr (FOMC voter) said that policy is at or near the peak rate. This week compressed the 2s10s spread by four basis points … Continue reading “Bond Traders Weekly Outlook: Bonds Rally Gained Legs, 20 Year Ahead to Test Resolve”
Bond Traders Weekly Outlook: Woeful Long Bond Auction and Powell Sets Tone
U.S. Treasuries U.S. Treasuries finished the week mixed with the long bond rebounding from Thursday’s slide after its woeful auction Thursday. The offering tailed by a record 5.3 bps with the lowest bid-to-cover ratio in nearly two years and lowest indirect takedown in two years. The long bond yield settled within a basis point of its 50-day moving average (4.728%). Shorter tenors extended this week’s show of relative weakness. Reports about a ransomware attack that crippled the Industrial and Commercial … Continue reading “Bond Traders Weekly Outlook: Woeful Long Bond Auction and Powell Sets Tone”
Moody’s Lowers Outlook on US Debt to Negative, Towards Fitch and S&P Global Downgrades
Rating agency Moody’s lowered its outlook on the US credit rating to “negative” from “stable”, pointing to a sharp rise in debt servicing costs with higher interest rates and “entrenched political polarization”. The move came after US markets had closed for the weekend. The move followed Fitch and S&P downgraded the US. The credit ratings agency maintained the USA’s top Aaa rating but changed its outlook to ‘negative’. Moody’s is the only of the three big credit rating agencies that … Continue reading “Moody’s Lowers Outlook on US Debt to Negative, Towards Fitch and S&P Global Downgrades”
Woeful 30-year Treasury Bond Auction with Record 5.3 bps Tail Completes Week’s Offerings
U.S. Treasuries trading to new lows after the U.S. Treasury completed this week’s note and bond auction offerings with a $24 bln 30-yr bond reopening, which met woeful demand. Longer tenors led a slide that sent yields on 10s and 30s back to this week’s highs while yields on shorter tenors hit their highest levels in a week. Today’s $24 bln 30-yr bond auction met much weaker demand than sales of 3- and 10-yr notes over the past two days. … Continue reading “Woeful 30-year Treasury Bond Auction with Record 5.3 bps Tail Completes Week’s Offerings”
Solid International Demand in Latest U.S. 10-year Bond Auction
U.S. Treasuries hit fresh highs with the just-completed $40 bln 10-yr note sale meeting solid international demand. The sale drew a high yield of 4.519%, which stopped through the when-issued yield by 0.8 bps while the bid-to-cover ratio (2.45x) was right in-line with average and indirect takedown (69.7%) was a bit above average (65.4%). The post-auction buying saw the 10-yr yield slipping toward its low from Friday (4.484%) while the 30-yr yield has slid past Friday’s low to a level … Continue reading “Solid International Demand in Latest U.S. 10-year Bond Auction”