The yield on the 10-year US Treasury note pulled back to 5.286% after surging to 5.35%, its highest level since 2002, while the 30-year yield also retreated from a 24-year high to 5.666%. The pullback came after the US Treasury auctioned 39 billion dollars of 10-year notes on Wednesday, October 7. Analysts at BMO viewed the auction as strong, as bids from non-dealers came in above average. Indirect bidders, which include central banks around the world, accounted for 80.3% of the total auction, above the 72.4% average of the last 10 auctions. Direct bidders took 17.1%, slightly below the 18.3% average, while dealers took just 2.5%, far below the 9.4% average. The auction was the second of three by the US Treasury this week, following 58 billion dollars of 3-year notes on Tuesday, October 6, and a 22 billion dollar 30-year auction is due today, October 8. The bond market has faced heavy selling pressure recently on concerns over inflation and surging oil prices, with the 10-year yield up 0.60% since the end of July, while US crude oil prices have jumped 20% over the same period.
Bank of MontrealStrong 10-year auction with above-average foreign/indirect demand pulled the 10-year yield back to 5.286% from a 5.35% high.
30-year yield retreated from a 24-year high to 5.666% amid the broader bond-market pullback after the strong 10-year auction.
