Rates in Real Time

Treasury debt securities may be trading lower, but Wednesday's auction of $25B worth of new 30 Year Long Bonds went quite well. The high yield awarded printed at 4.608%, stopping though the "when issued" at the time by 2.2 basis points. That was the largest "stop through" since late 2020. Bid to cover showed nice demand at 2.642, well above the recent norm of about 2.4 for this series.

After that, it gets a little messy. Foreign demand was not overly impressive with Indirect Bidders taking down 62.7% of the issuance. In October, foreign accounts took down an 80.5% slice of this pie. However, domestic accounts showed unusual interest in grabbing some thirty-year sovereign debt. Direct Bidders took down a 27.1% allocation of this auction, up from a paltry 7.4% last month. This was the third largest take down by Direct Bidders for this series on record. This left dealers with just 10.2% of the sale, the smallest slice of the Thirty-Year pie dealers have been "stuck with" since the June 2023 auction.

For the session on Wednesday, the yield for the US Thirty Year Bond ran up 18 basis points to 4.66%, while the yields for the US Ten- and Two-Year Notes popped 15 basis points and 9 basis points respectively to go out at 4.44% and 4.29% in that order. US Treasuries have found a bid overnight. As I work my way through Thursday morniing, I see 30 Year, 10 Year and 2 Year US sovereigns paying 4.55%, 4.36%, and 4.22% respectively.