US Treasury bonds held onto their morning gains in afternoon trading, following a robust reopening auction for 20-year notes which ensured solid demand for long-dated debt and outperformance on the day. The earlier advance was propelled by a continued slide in oil prices, fueled by a US-Iran deal expected to facilitate the reopening of the Strait of Hormuz.
Shortly after 3 p.m. in New York, Treasury yields were down 2 to 5 basis points across the curve, displaying a bull-flattening move that narrowed the 2s10s spread by approximately 2 basis points for the session. The yield on the 10-year Treasury hovered near its daily low in late trading, around 4.425%.
The 20-year Treasury auction demonstrated notable strength, with a high yield of 1 basis point below its when-issued level. The auction metrics were similarly strong, subsequently providing support for long bonds—primary dealers were awarded 8.5%, the lowest since January, indirect bidders took 71.6%, the highest since July 2024, and direct bidders' share fell to 19.9%.
Prior to the auction's start, Treasuries found firm support as oil extended its daily losses. Brent crude fell below $80 a barrel for the first time in over three months, driven by the US-Iran agreement anticipated to reopen the Strait of Hormuz.
As of 3:41 p.m. ET, the yield on the 2-year Treasury was 4.0453%.
The yield on the 5-year Treasury was 4.1493%.
The yield on the 10-year Treasury was 4.4237%.
The yield on the 30-year Treasury was 4.9254%.
The 2-year to 10-year Treasury yield spread was 37.63 basis points.
The 5-year to 30-year Treasury yield spread was 77.44 basis points.
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