U.S. Treasuries ended the week lower as yields on short-term government debt in the US, UK and eurozone have begun to rise again anticipating more prolonged rate increases to contend with price rises. Rate hike expectations continued growing with the fed funds futures market now showing a 66.5% implied likelihood of another 25-bps increase in June, up from 17.4% a week ago. In the U.K. two-year gilts had one of the biggest weekly falls in 20 years. The entire Treasury … Continue reading “Bond Traders Weekly Outlook: Two Year Rates Jump in U.S., U.K and E.U on Inflation Fears”
Strong 7-year Treasury Bond Auction Completes Week’s Solid Offerings
U.S. Treasuries completed this week’s note auctions with excellent demand for the $35 bln 7-yr note auction. The sale drew a high yield of 3.827%, which stopped through by 0.8 bps versus the when-issued yield, the bid-to-cover ratio (2.61x) and indirect takedown (72.3%) were well above average. The fixed interest desk rated the auction an A. Yesterday treasuries completed a $43 bln 5-yr note auction which met strong demand. Tuesday, we saw a $42 bln 2-yr note C rated auction. Equities … Continue reading “Strong 7-year Treasury Bond Auction Completes Week’s Solid Offerings”
Strong Demand in 5-Year Treasury Auction Follows Yesterday’s Strong 2-Year
U.S. Treasuries added to their lows after the recent completion of a $43 billion 5-yr note sale, which met strong demand which followed yesterday’s equally impressive 2-yr note auction. The high yield (3.749%) stopped through the when-issued yield by 1.4 bps while the bid-to-cover ratio (2.58x) and indirect takedown (72.7%) were above average. With increasing uncertainty over the debt ceiling equities have been selling off. The desk gave a B- rating on the auction. Today’s sale followed yesterdays $42 bln … Continue reading “Strong Demand in 5-Year Treasury Auction Follows Yesterday’s Strong 2-Year”
How the U.S. Treasury Securities Market Works
The U.S. Treasury finances the operations of the United States government by collecting revenue such as tax but also by borrowing by issuing short term bills, notes and bonds. These various types of securities. are backed by the full faith and credit of the United States government. The US Treasury market is the largest and most liquid government bond market in the world. It is where the US government raises funds to finance its operations and debt obligations, and it … Continue reading “How the U.S. Treasury Securities Market Works”
Highest Share of International Buyers Since June 2009 in 2-year Treasury Bond Auction
U.S. Treasuries trade just below session highs, with the 2-yr note continuing to underperform and still in the red with shorter tenors now little changed for the day. The market rebounded off opening lows into the completed $42 bln 2-yr note sale, which met strong demand. The auction drew a high yield of 4.300%, which stopped through the when-issued yield by 1.5 bps while the bid-to-cover ratio (2.90x) and indirect takedown (61.2%) were comfortably above average, best since June 2009. … Continue reading “Highest Share of International Buyers Since June 2009 in 2-year Treasury Bond Auction”
Bond Traders Weekly Outlook: Two Year Note Compresses 2s10s Spread Further
U.S. Treasuries ended the week mixed with the sixth consecutive loss for the 5-yr note through to longer tenors. Treasury yields moving lower in response to debt ceiling and regional bank worries. This week’s fall was paced by shorter tenors keeping the yield curve under pressure, compressing the 2s10s spread by six basis points for the second consecutive week, to -58 bps. The US 2-year yield rose 29 basis points on the week trading at 4.27%. The high yield reached … Continue reading “Bond Traders Weekly Outlook: Two Year Note Compresses 2s10s Spread Further”
U.S. 20-year Treasury Bond Auction Sees Solid Demand Amongst Debt Ceiling Muddle
U.S. Treasuries closed with losses across the curve after giving back their opening gains with longer tenors seeing some buying in immediate reaction to today’s $15 bln 20-yr bond sale, which met solid demand, however the post-auction bid quickly gave way to a slip to fresh lows into the close. Todays followed last weeks’ strong 3-, 10- and 30-year auctions. Today’s sale drew a high yield of 3.954%, which stopped through the when-issued yield by a basis point. The bid-to-cover … Continue reading “U.S. 20-year Treasury Bond Auction Sees Solid Demand Amongst Debt Ceiling Muddle”
Bond Traders Weekly Outlook: Two Year Note Underperforms After Stellar Treasury Auction Week
U.S. Treasuries ended the week lower, giving back their gains from earlier in the week. Friday’s retreat left yields on 10s and 30s little changed for the week while the 2-yr note underperformed. The 2-yr Treasury note yield rose seven basis points to 3.98% this week and the 10-yr note yield rose one basis point to 3.46%. The 2s10s spread compressed by six basis points to -52 bps. The U.S. Treasuries auction were all strong this week. A $21 billion … Continue reading “Bond Traders Weekly Outlook: Two Year Note Underperforms After Stellar Treasury Auction Week”
Solid Demand at US 30-year Treasury Bond Auction Following April CPI and PPI Data
U.S. Treasuries are trading in positive territory after the completion of a strong $21 billion 30-yr bond auction met solid demand. The high-yield was 3.741%, which stopped through the when-issued yield by 1.5 bps, while the bid-to-cover ratio (2.43x) and indirect takedown (72.4%) were comfortably above average. The auction followed lower than expected CPI and PPI reports for April. The Fixed Interest desk rated it an A completing a strong week after yesterday’s completed $35 bln 10-yr note sale which … Continue reading “Solid Demand at US 30-year Treasury Bond Auction Following April CPI and PPI Data”
Solid Demand at 10-year U.S. Treasury Bond Auction Following CPI Report
US Treasuries trade near their best levels of the day, with little reaction to the completed $35 bln 10-yr note sale which met solid demand just under yesterday’s stellar 3-yr note sale. Today’s reopening drew a high yield of 3.448%, tailing the when-issued yield by 0.9 bps basis points. The bid-to-cover ratio (2.45x) and indirect takedown (67.5%) were a bit above average. Notably yesterday’s $40 bln 3-yr note sale found stronger interest, the shorter date in line with the bond … Continue reading “Solid Demand at 10-year U.S. Treasury Bond Auction Following CPI Report”