Weak Results for Treasury's 30-Year Bond Auction

Headline Alert

Bond Update: Another Weak Bond Auction Sends Yields Higher

The Treasury’s auction of $13 billion in 30-yr bonds produced a yield of 4.52%, with 40.62% allotted at high

The Bid-to-cover ratio was 2.45 which was just above the 2.41 average of the last 8 auctions

However, indirect participation (big institutions and foreign governments) was 40.2%; well below the average of 42.82%.

The bottom line is this was a poorly bid auction as investors may be reluctant to commit funds for the long-term given that supply is likely to increase and rates are likely to rise.

The 30-year T-bond retreated immediately after the auction, pushing yields up as far as 4.51 percent, its highest since August.

 

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