U.S. 30-year Treasury Bond Auction with High Yield of 2.340% Slapped by CPI and Bullard

The US Treasury 30-Year Bond Sale performed softer than the recent 3- and 10-year auction and today’s CPI report. Just prior to the auction St. Louis Fed President Bullard (FOMC voter) said he supports raising the fed funds rate range by 100 bps by the start of July. The tail was -1.1 basis points with WI level at time of the auction 2.329% and the high yield of 2.340% at the auction.

The bid-to-cover ratio of 2.68x was above average 2.52x, as was indirect takedown 77.56% vs 65.5% average. The desk gave an A- rating on the auction.

Auction Highlights

  • Duration: 30 Years
  • Amount:  $23 billion
  • High yield 2.340%
  • WI level at time of auction 2.329%
  • Tail -1.1 basis points
  • Bid-Cover Ratio: 2.30X (prev 2.35)
  • Direct Accepted: 17.8% (prev 17.1%)
  • Indirect Accepted: 68.0% (prev 65.0%)
  • Dealers 7.4% (prev %)

Auction grade: D

Yields after the auction

  • 2-yr: +21 bps to 1.55%
  • 3-yr: +18 bps to 1.79%
  • 5-yr: +14 bps to 1.94%
  • 10-yr: +10 bps to 2.03%
  • 30-yr: +9 bps to 2.32%

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

  • High yield: 2.085%
  • Bid-to-cover: 2.29
  • Indirect bid: 62.7%
  • Direct bid: 18.4%

Live From the Pit

From The TradersCommunity US News Desk