Treasury Dept auctions $20 billion of 10-year notes at a high yield of 1.516%

Weak demand at $20B sale of 10-year notes
Weak demand at $20B sale of 10-year notes

U.S. sovereign bond prices held lower on Tuesday after the Treasury Department auctioned $20 billion in 10-year notes at a high yield of 1.516 percent on Tuesday.

The bid-to-cover ratio, an indicator of demand, was 2.33, its lowest level since March 2009 and below a recent average of 2.65.

Indirect bidders, which include major central banks, were awarded 54.3 percent, well below a recent average of 64 percent. Direct bidders, which includes domestic money managers, bought 7.9 percent, also below a recent average of 12 percent.

The yield on the 10-year Treasury note, which moves inversely to its price, was near a session high of 1.503 percent, its highest level since June 30 when the 10-year yielded as high as 1.546 percent. It was last at 1.5093 percent.

Meanwhile, the 30-year Treasury bond was last higher at 2.2287 percent.

The S&P 500 hit record intraday and closing highs in Monday's session, finishing 0.34 percent higher at 2137.16 points.


The Japanese government meanwhile said it would compile a stimulus package by month-end, but again did not reveal the amount it plans plan to spend. There was also talk of issuing construction bonds to fund the program.

There were 5.5 million job openings in May, down from 5.79 million job openings in April, according to the Job Openings and Labor Turnover Summary (JOLTS) report.

U.S. wholesale inventories rose marginally in May as automobile stocks tumbled, suggesting inventory investment likely remained a drag on economic growth in the second quarter.

A number of Federal Reserve speeches are scheduled, including Minneapolis Fed President Neel Kashkari from 6:30 p.m. ET, and Cleveland Fed President Loretta Mester at 10:30 p.m. ET.

St. Louis Fed President James Bullard stuck to his perspective that only one interest rate hike will be necessary in the forseeable future.

Treasury auctions scheduled for Tuesday include $45 billion worth of 4-week bills.