$39 Billion 10-Year Auction Pulls Treasury Yield Off 5.35% Peak
Updated
Updated · CNBC · Oct 7
$39 Billion 10-Year Auction Pulls Treasury Yield Off 5.35% Peak
3 articles · Updated · CNBC · Oct 7
Summary
The 10-year Treasury yield retreated from 5.35%—its highest since 2002—after a strong $39 billion note sale, though it still traded around 5.286% and the auction cleared at 5.3%, the highest since 2000.
Indirect bidders took 80.3% of the issue, well above the 72.4% 10-auction average, while dealers absorbed just 2.5% versus a 9.4% norm, signaling robust demand from non-dealer buyers including global central banks.
That demand interrupted a broader bond selloff driven by inflation and energy worries: the 10-year yield has jumped 60 basis points since late July as U.S. crude has risen 20%.
Pressure remains global and policy-driven, with French and U.K. 10-year yields also climbing and Fed minutes showing most officials still expect another rate hike by year-end.
The sale was the second of three Treasury auctions this week, ahead of a $22 billion 30-year bond offering and a buyback of at least $4 billion in 20- to 30-year maturities.