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U.S. Treasury Prices Rally on Weak Equities

U.S. Treasury yields fell on Tuesday after the U.S. government’s auction of 3-year Treasury notes, the first of three debt auctions this week.  The Treasury Department auctioned $27 billion in three-year notes at a high yield of 0.992 percent, the highest since May 2011. The bid-to-cover ratio, an indicator of demand, was 3.38.

In the “when issued” market, traders had expected the issue due July 2017 fetch a yield of 0.996 percent.  Indirect bidders, which include major central banks, were awarded 38.2 percent of the supply, their largest share since February.  Three-year Treasury notes rose 3/32 in price to yield 0.943 percent after the announcement.

The yield on benchmark 10-year Treasury notes—used to calculate mortgage rates and other consumer loans—last stood at 2.56 percent, down from 2.62 on Monday. The 30-year bond, meanwhile, was up 1 6/32 in price to yield 3.38 percent, down from yesterday’s 3.44 percent.

CNBC [1]

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