×

US Treasury yields lower after sale

Bond traders at CME Group
Getty Images

U.S. sovereign bonds yields held lower on Wednesday after the Treasury Department auctioned $21 billion in 9-year 11-month notes at a high yield of 2.233 percent.

The bid-to-cover ratio, an indicator of demand, was 2.64. Indirect bidders, which include major central banks, were awarded 62 percent, while direct bidders, which include domestic money managers, were awarded 12.1 percent.

After the sale, bond yields were down, as the whipsaw moves seen in the oil price added to investor anxiety ahead of the Federal Reserve's meeting next week. Investors moved into safe haven U.S. Treasurys after U.S. crude fell below $37 per barrel and internationally traded Brent fell below $40 on Tuesday for the first time since early 2009.

Yields on 10-year Treasurys were at 2.2094 percent on Wednesday, after closing at 2.238 percent on Tuesday.

Meanwhile, 30-year bond yields traded at 2.9624 percent after ending at 2.975 percent in the previous session.

Symbol
Yield
 
Change
%Change
US 3-MO
---
US 1-YR
---
US 2-YR
---
US 5-YR
---
US 10-YR
---
US 30-YR
---

Oil rose on Wednesday, after the Energy Information Administration reported the first fall in crude stockpiles in nearly three months, before reversing and going negative.

U.S. West Texas Intermediate (WTI) crude futures settled 0.9 percent, or 35 cents, lower at $37.16 per barrel Wednesday. Internationally traded Brent futures were 7 cents lower at $40.19 a barrel.

Other data due for release included wholesale inventories numbers for October, which fell 0.1 percent. The Treasury auctions $21 billion in reopened 10-year notes at 1 p.m. ET.

"Oil prices have stopped falling, at least for now. Bund yields are 10 basis points (bp) higher than they were a week ago, whereas Japanese government bond yields are lower than they were and Treasury yields are 5 bp higher. Hence, euro strength but as the post-ECB dust settles, I can't think of a good reason for these yield levels to persist. Whereas a 10-year note auction in the US today is worth watching," global strategist at Societe Generale, Kit Juckes, said.

Since the start of this month, oil is down about 10.4 percent, while the S&P is off 1.9 percent, but without energy stocks it would be down 1.2 percent, according to S&P Capital IQ.

Analysts had expected this week to be relatively quiet with traders awaiting the Fed's rate decision next week. The Fed is expected to raise its fed funds target rate by 0.25 percent, in the first rate hike in nine years.

— CNBC's Patti Domm contributed to this report.