US bonds selloff eases, yields off highs after strong 10-year note auction
TLT•U.S. Treasuries rose in afternoon trading after a $39 billion 10-year note auction drew strong demand, while falling oil prices helped yields retreat from earlier highs. The 10-year yield was 5.284%, after reaching 5.364%.
1. Auction draws demand
The $39 billion 10-year note auction priced at 5.3%, below the rate expected at the bid deadline. Its bid-to-cover ratio was 2.77, above the six-auction average of 2.54, and primary dealers took 2.5% of the offering, their smallest share since the aftermath of the global financial crisis.
2. Yields retreat from highs
Treasury yields eased from earlier highs as oil prices fell. The 10-year yield was up 1.3 basis points at 5.284%, after reaching a 24-year high of 5.364%; the 30-year yield was up 2.8 basis points at 5.669%. The two-year yield fell 2.3 basis points to 4.768%.
3. Other market factors
Earlier selling pressure followed oil’s rise above $100 a barrel and reports that SpaceX was seeking $40 billion in financing for Nvidia chip purchases. Federal Reserve meeting minutes showed policymakers divided over the rationale for raising interest rates.
