Solid 30-year Treasury Bond Auction with High Yield of 2.997% Follows CPI and PPI

The US Treasury 30-Year Bond Sale of $22 billion performed stronger than the recent 3 and 10-year auction after today’s PPI report. The tail was 0.9 basis points with WI level at time of the auction 3.006% and the high yield of 2.997% at the auction. The Fixed Interest desk rated it an A after yesterday’s C- on the 10-year auction.

The bid-to-cover ratio of 2.30x was below average 2.31x, as was indirect takedown 65.2% vs 65.8% average. The desk gave an B- rating on the auction.

Auction Highlights

  • Duration: 30 Years
  • Amount:  $20 billion
  • High yield 2.997%
  • WI level at time of auction 3.006%
  • Tail 0.9 basis points
  • Bid-Cover Ratio: 2.38X vs. six-month average of 2.31X
  • Direct Accepted: 16.6% vs six-month average of 17.4%
  • Indirect Accepted: 69.66% vs six-month average of 64.9%
  • Dealers 13.7% vs six-month average of 17.7%

Auction grade: A

Yields after the auction

  • 2-yr: -7 bps to 2.57%
  • 3-yr: -5 bps to 2.77%
  • 5-yr: -5 bps to 2.83%
  • 10-yr: -8 bps to 2.85%
  • 30-yr: -5 bps to 2.99%

Yields ahead of the auction

  • 2-yr: -6 bps to 2.58%
  • 3-yr: -3 bps to 2.79%
  • 5-yr: -3 bps to 2.85%
  • 10-yr: -6 bps to 2.87%
  • 30-yr: -3 bps to 3.01%

Average results of previous 12 auctions: High yield: 2.005%

  • High yield: 2.167%
  • Bid-to-cover: 2.30
  • Indirect bid: 64.6%
  • Direct bid: 17.9%

Live From the Pit

From The TradersCommunity US News Desk