Long-term Treasury yields finished at their lowest levels in more than a month on Wednesday after a 10-year auction went as expected and reaffirmed buying interest in government debt.
What happened
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The yield on the 2-year Treasury
BX:TMUBMUSD02Y
rose 2.1 basis points to 4.936% from 4.915% on Tuesday. -
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
slipped 4.8 basis points to 4.522% from 4.570% Tuesday afternoon. -
The yield on the 30-year Treasury
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dropped 7.9 basis points to 4.655% from 4.734% late Tuesday. - Wednesday’s levels are the lowest for the 10- and 30-year rates since Sept. 22, based on 3 p.m. Eastern time figures from Dow Jones Market Data.
What drove markets
The Treasury’s $40 billion auction of 10-year notes, held at 1 p.m. Eastern time on Wednesday, produced average demand after factoring in its increased size, according to macro strategist Will Compernolle of FHN Financial in New York.
Along with Tuesday’s sale of $48 billion of 3-year notes, which also went as expected, Wednesday’s sale gave hope that buying interest in long-dated government debt can continue despite an onslaught of supply.
Meanwhile, U.S. data showed that the level of inventories, or unsold goods, that U.S. wholesalers are keeping on hand fell in September to a 13-month low.
What analysts are saying
“The big catalyst today was the $40 billion 10-year auction,” said Michael Reinking, a senior market strategist for the New York Stock Exchange.
Following a string of weak auctions and an increase in size, “this was closely watched,” Reinking wrote in a note. “Given the recent move lower in yields, it seems like markets were content with the results despite the auction being a little bit sloppy.”
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