Bond Traders Weekly Outlook: US Treasury Auctions Outperform Ahead of FOMC

U.S. Treasuries pulled back for the second consecutive day on Friday, resulting in a mixed finish for the week. Inflation watchers saw a milder PCE as expected while Japan’s Tokyo Core CPI rose 4.4% yr/yr in January it was back on topic. The 10-yr note yield settled the week at 3.52%. The 2-yr note yield, which is most sensitive to changes in the Fed funds rate, settled at 4.21%. U.S. Treasuries completed this week’s spectacular note auctions with the $35 bln 7-yr … Continue reading “Bond Traders Weekly Outlook: US Treasury Auctions Outperform Ahead of FOMC”

Strong U.S. 7-year Treasury Bond Auction with International Buyers Highest Since May

U.S. Treasuries completed this week’s spectacular note auctions with the $35 bln 7-yr note high yield of 3.517%, which stopped through the when-issued yield by 2.1 bps. The bid-to-cover ratio (2.69x) well above average (2.48x) while indirect takedown (international buyers) at 77.1%, the highest level since May. This followed yesterday’s 5-year sale which also stopped through strongly. We are seeing a continuation of foreign buyers of US Treasuries stepping up purchases after JGB volatility and uncertainty in Europe with Russia. The … Continue reading “Strong U.S. 7-year Treasury Bond Auction with International Buyers Highest Since May”

Bond Traders Weekly Outlook: U.S. Treasuries Backed Off September Highs on Optimistic Chatter

U.S. Treasuries continued the move from last week through Wednesday giving back most of those gains Friday resulting in a slightly higher finish for the week in most tenors. The long bond ended negative territory for the week while the 10-yr note and shorter tenors gave back most of their gains from Wednesday’s surge that sent yields on these tenors to levels not seen since September. Together with hopeful rhetoric Treasuries and European debt faced pressure at the end of … Continue reading “Bond Traders Weekly Outlook: U.S. Treasuries Backed Off September Highs on Optimistic Chatter”

Strong Demand at U.S. 20-year Treasury Bond Auction Follows Last Week’s Series

U.S. Treasuries traded firmly with the belly of the curve continuing today’s outperformance pressuring yields toward their lowest levels of the day. Earlier we had a lower-than-expected PPI for December. The completion of today’s $12 bln 20-yr Treasury bond reopening, followed the path of last week’s auctions meeting excellent demand.  The high yield 3.678%, which stopped through the when-issued yield by 2.7 bps while the bid-to-cover ratio (2.83x) and indirect takedown (76.3%) were comfortably above average. The desk gave a … Continue reading “Strong Demand at U.S. 20-year Treasury Bond Auction Follows Last Week’s Series”

Bond Traders Weekly Outlook: US Completes Three Strong Auctions with Spectacular International Demand

U.S. Treasuries closed out the week on a lower note, after two days of strong gains around the December CPI report. Fed Chair Powell’s speech at the Riksbank International Symposium offered no anguish and a strong University of Michigan’s consumer sentiment report finished the week. The four-week bill yield jumped nearly 25 bps to 4.45% amid growing focus on the upcoming debt ceiling debate. The week saw three extremely strong auctions. $18 bln 30-yr bond reopening, $32 bln 10-yr note reopening, … Continue reading “Bond Traders Weekly Outlook: US Completes Three Strong Auctions with Spectacular International Demand”

Record Foreign Demand at US Treasury Bond Reopening Completes Strong Auction Week

U.S. Treasuries were led higher by the long bond building on its gain after the completion of this week’s third extremely strong auction. The desk gave an A- rating on the auction. Today’s $18 bln 30-yr bond reopening stopped through by 2.4 bps and benefited from record foreign demand with Japanese investors looking outward after the BoJ shift. It followed these week’s $32 bln 10-yr note reopening, which met excellent demand and the impressive 3-yr note sale. Today’s sale followed the … Continue reading “Record Foreign Demand at US Treasury Bond Reopening Completes Strong Auction Week”

Solid International Demand in 10-year U.S. Treasury Bond Auction Ahead of CPI

US Treasuries rallied Wednesday with most tenors picking up after the completion of today’s $32 bln 10-yr note reopening, which met excellent demand.  The auction drew a high yield of 3.575%, which tailed the when-issued yield by 0.5 bps. The bid-to-cover ratio (2.53x) and indirect takedown (67.0%) were well above average.  Today’s auction followed yesterday’s impressive 3-yr note sale. The market is showing minimal concern ahead of tomorrow’s release of the US CPI report for December.  Another factor was the U.S. … Continue reading “Solid International Demand in 10-year U.S. Treasury Bond Auction Ahead of CPI”

Strong International Demand at 3-Year Treasury Bond Auction

US Treasuries saw some buying interest after the completion of a robust $40 bln 3-year note sale. The auction drew a high yield of 3.977%, which stopped through the when-issued yield by 2.3 bps. The bid-to-cover ratio (2.84x) and indirect takedown (69.5%) were well above average. The strong results point to new year buying and limited concern ahead of Thursday’s release of the CPI report for December. The desk gave a B rating on the auction. The S&P 500 and Nasdaq … Continue reading “Strong International Demand at 3-Year Treasury Bond Auction”

Bond Traders Weekly Outlook: Treasuries Soar on Soft Data Ahead of CPI and Powell

U.S. Treasuries closed out the first week of 2023 in beastly form Friday following the December jobs report average hourly earnings growth moderating to 4.6% year-over-year from 4.8% in November. It is a key gauge for the Fed and front end led a broad-based rally fueled by short covering. The soft wages data had some kindling thrown on from ISM services and factory orders, both much weaker than anticipated. The US dollar concurred with the Bond market and weakened sharply against … Continue reading “Bond Traders Weekly Outlook: Treasuries Soar on Soft Data Ahead of CPI and Powell”

German 10-Year Bunds Close Year at Weakest Level since 2011

Germany’s benchmark 10-year Bund yield closed 2022 at 2.5% at the end of 2022, close to its highest level since July of 2011, and up from about -0.1% at the beginning of the year. Bunds being the inverse, closed at the weakest since then. Germany is facing severe head winds with the energy crisis bearing down with inflation pressures. However, the ECB is aggressively raising rates. Yields have been also supported by expectations of increasing government funding and falling excess … Continue reading “German 10-Year Bunds Close Year at Weakest Level since 2011”