The Treasury Department auctioned $21 billion in 10-year notes at a high yield of 2.066 percent — lowest since April, according to Reuters. The bid-to-cover ratio, an indicator of demand, was 2.59, versus the 2.67 recent average.
Direct bidders, which includes domestic money managers, bought 10.3 percent, versus a recent average of 11 percent.
Indirect bidders, which include major central banks, were awarded 62.2 percent, well above the 57 percent average.
Indirects were aggressive, getting 90.7 percent of what they bid for versus an 86 percent norm and dealers got 16.1 percent of what they bid for against an 18.5 percent norm, according CRT's analysis.
"Clearly someone wanted to buy this, but the curious point is that such a strong bid has not provoked a deeper rally," according to David Ader, a bond market strategist for CRT Investment Banking.
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Treasury prices dipped on Wednesday as higher oil prices and stocks lowered demand for "safe haven" U.S. government debt.
Bond yields, which move in the opposite direction of prices, were trading within recent ranges — in relatively light volume — as traders awaited the Treasury Department's $21 billion 10-year note auction at 1 p.m. ET.
"It's a deadly quiet day here in the bond market," said David Ader, a bond market strategist for CRT Investment Banking. "It's a light volume day and I think that's going to bode for a soft reception for the 10-year note auction."
Wednesday's trading volume was roughly 70 percent of the 10-day average.
The Treasury kicked off this week's $58 billion debt supply on Tuesday with a three-year note offering that traders categorized as ordinary.
The Treasury auctioned $24 billion in three-year notes at a high yield of 0.895 percent, virtually in line with the when-issued yield. The bid-to-cover ratio, an indicator of demand, was 3.14 — the lowest since August 2014.
With the global economy on the backfoot and U.S. job creation slowing — Labor Department data last week showed the economy had generated about 142,000 jobs in September, far below consensus estimates — the case is growing for the central bank to preserve the status quo on monetary policy.
Fed-funds futures, used by Wall Street to place bets on monetary policy, showed only a 5 percent chance that the central bank would hike rates at its October meeting, according to CME Group data.
Concerns over global economic growth have pushed the 10-year note yield down from this year's peak of 2.5 percent in June. Few bond traders expect to see major jumps in long-dated yields unless growth worries intensify and inflation picks up.
On the data front, weekly mortgage applications rose 25.5 percent amid anxiety over new mortgage regulations, the Mortgage Bankers Association said.
Separately, the Energy Department said U.S. crude inventories rose by 3.1 million barrels in the last week, compared with analysts' expectations for an increase of 2.2 million barrels.