Yields pare gains after strong 10-year auction
Bond liquidations send yields sharply higher
Volumes surge in overnight trading
Strong demand at 10-year Treasury note auction
(Updated in New York afternoon time)
NEW YORK, April 9 (Reuters) –
Benchmark 10-year Treasury yields pared gains after the Treasury saw strong demand for a $39 billion sale of the notes on Wednesday, potentially easing concerns about deteriorating demand for the debt.
of 4.435%, around three basis points below where they had traded before the sale. Demand was 2.67 times the amount of debt on offer, the highest ratio since December.
Markets have been spooked by larger than expected tariffs placed by the Donald Trump administration on U.S. trading partners.
Yields have surged this week as traders pile out of Treasuries to meet margin requirements, or after reaching stop loss levels or taking profits from a sharp rally late last week.
Speculation has also increased that large foreign holders of Treasuries including China may be offloading some of their portfolio as they face off against the United States in a rapidly escalating trade war.
But indirect bidders, which includes foreign central banks, took the 87.9% of Wednesday’s sale, much higher than their average of 70%, suggesting strong foreign demand.
The Treasury will also auction $22 billion in 30-year bonds on Thursday.
The 10-year note yield was last up 12.6 basis points on the day at 4.384%. It earlier reached 4.515%, the highest since February 20.
Thirty-year bond yields gained 12.7 basis points to 4.841% and got as high as 5.023%, the highest since November 2023.
The interest-rate sensitive two-year yield fell 1.5 basis points to 3.723%.
The yield curve between two- and 10-year note yields surged as the shorter-dated debt remained relatively stable compared to longer-dated debt. It reached 74 basis points, the steepest since January 2022, and was last at 66 basis points. (Reporting By Karen Brettell; Additional reporting by Davide Barbuscia; Editing by Chizu Nomiyama and Nick Zieminski)
