Yields Slightly Higher on U.S. 30-year Bond Auction

The U.S. Treasury today auctioned $13 billion in 30-year bonds at a yield of 2.904%, the highest level since May. The bid-to-cover ratio reached 2.49, well below the 2.64 average of the last four sales. Indirect bidders, usually considered to be foreign interests, purchased just 26.5% of the total sale, the lowest level since August 2011.

Today’s report of a rise in the U.S. trade deficit and the large drop in unemployment claims due to a non-reporting “large” state have not improved the U.S. economic outlook, and the rising yields on the very long-term bonds reflects that. US equity markets are got an early boost today from four strong IPOs, but the markets have pulled back in afternoon trading.

The 10-year Treasury yields initially fell after the 30-year note auction, but later posted a gain for the day, as did the 30-year yields.

Paul Ausick