US Treasuries ended mixed after a strong auction of 10-year notes signaled that yields at multi-decade highs fueled investor appetite. The Treasury’s $39 billion sale of 10-year notes was awarded at 5.3%, well below the prevailing yield before the auction, indicating solid demand.
"This is showing that finally the deeper-pocketed guys find these levels appealing," said Monty Gandhi, rates strategist at SMBC. Ten-year yields were little changed at 5.28%, down from as high as 5.36% earlier, a level last seen in 2002. The 30-year yields were up one basis point at 5.67%.
The global bond market has been hammered as elevated energy prices fueled inflation concerns. Brent crude briefly topped $102 a barrel after Iranian attacks on vessels in the Strait of Hormuz.
"We continue to think the market remains caught between attractive outright yield levels and an oil story that refuses to fade," said Evelyne Gomez-Liechti of Mizuho International. Treasury Secretary Scott Bessent described the yield rise as a "global phenomenon" driven by growth. The bid-to-cover jumped to 2.77%, the most since 2016, with non-dealer investors taking a record 97.5% of the auction.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing