Treasury yields rise on weak 5-year notes sale

Traders work in the S&P 500 options pit at the Chicago Board Options Exchange.
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Traders work in the S&P 500 options pit at the Chicago Board Options Exchange.

U.S. Treasury yields rose after the Treasury Department auctioned $35 billion in five-year notes at a high yield of 1.387 percent.

The bid-to-cover ratio, an indicator of demand, was 2.35, lower from a recent average of 2.63. This auction's bid-to-cover ratio was also the weakest since July 2009, resulting in the issue to sell at higher-than-expected yield, Treasury data showed.

Indirect bidders made up 55.7 percent, slightly higher than a recent average of 55 percent, while direct bidders took 4.7 percent, well-below the recent average of 11 percent and the lowest since June 2013.

Five-year Treasury yields rose to 1.462 percent following the sale, up from 1.3667 percent before. Benchmark yields also rose following the sale, rising to 1.9182 percent from 1.8853 percent. Thirty-year bond yields rose from 2.4993 percent to 2.4822 percent after the auction.

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This was the second of three Treasury offerings this week. The Treasury Department's final sale this week is scheduled for Thursday at 1 p.m., as $29 billion in seven-year notes will be sold.

Earlier, U.S. Treasury yields rose after falling on weaker-than-expected U.S. durable goods orders.

US 10-YR
US 30-YR

The Commerce Department said on Wednesday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dropped 1.4 percent last month after a revised 0.1 percent dip in January.

Treasury prices rose following inflation data on Tuesday, while this week's $90 billion worth of fixed-rate instruments issued in two-year, five-year and seven-year securities has also help to cap gains.

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Five-year note yields last traded at 1.4145 percent.

Seven-year note yields last traded at 1.7223 percent.

Benchmark Treasury note yields were last up at 1.9251 percent, while 30-year bond yields rose to 2.5071 percent.

—Reuters contributed to this report.