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Yields pare gains; 5-year notes go at highest yield of 2015

Bond yields gave up earlier gains on Wednesday after the Treasury Department sold five-year notes at the highest yield for such an offering this year.

The Treasury Department auctioned $35 billion in five-year notes at a high yield of 1.560 percent, the highest since December.

The bid-to-cover ratio, an indicator of demand, was 2.46, compared to last month's 2.56 and a recent average of 2.58.

Yields were little changed from earlier after the announcement.

U.S. five-year notes were last trading at a yield of 1.53 percent, from a yield of 1.52 percent late Tuesday.

Benchmark 10-year U.S. Treasury yields were last at 2.13 percent, from a yield of 2.14 percent late Tuesday. U.S. 30-year Treasury yields fell to a session low of 2.87 percent, after touching 2.93 percent earlier.

Indirect bidders, which include major central banks, were awarded 58.5 percent, versus the 56 percent average. Direct bidders, which includes domestic money managers, brought 10 percent—the group's biggest share since October and on trend with recent averages.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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The dive lower in yields, which move inversely to prices, occurred after 30-year Treasury yields fell about 11 basis points to 2.89 percent on Tuesday. That marked their biggest one-day decline since May 15.

The move Tuesday occurred largely in response to a more than 1 percent rally in the U.S. dollar, which on Wednesday posted modest gains against a basket of major currencies.

"Yesterday was a big shock, it was a big movement in the overall U.S. Treasury market, and I think with a void of really specific news, there are some that are taking a profit," said Robbert van Batenburg, director of market strategy at brokerage Newedge USA LLC in New York.

Traders looked ahead to Thursday's release of weekly U.S. jobless claims data and Friday's preliminary first-quarter U.S. gross domestic product data.

Reuters contributed to this report.