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Treasury Dept. auctions $23 billion of 10-year notes at a high yield of 2.02%

The Treasury Department auctioned $23 billion in 10-year notes at a high yield of 2.02 percent.

The bid-to-cover ratio, an indicator of demand, was 2.22, the worst since March 2009, and lower than a recent average of 2.56. Indirect bidders, which include major central banks, were awarded 52.5 percent, the lightest since January 2015, and lower than a recent average of 65 percent. Direct bidders, which includes domestic money managers, bought 8.3 percent, also lower than a recent average of 10 percent.

U.S. government debt prices were mixed on Wednesday, with bond investors digesting the latest news that Republican candidate Donald Trump had won the race to the White House.

The yield on the benchmark 10-year Treasury note hit a high of 2.056 percent, it's highest since January 28, while the yield on the 30-year Treasury bond hit a high of 2.865 percent, also its highest level since January 28. Bond yields move inversely to prices.

The yield on the five-year Treasury note also hit a high of 1.46 percent, its highest level since June 2. The two-year note yield, however, rebounded to 0.886 percent after falling initially.

"The vast majority of the move in yields is [due to] inflation breakevens," said Marc Bushallow, managing director of fixed income at Manning & Napier. "People are expecting his policies to be inflationary, so that's why you're seeing yields move higher."

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
---
US 2-YR
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US 5-YR
---
US 10-YR
---
US 30-YR
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On Wednesday morning, business mogul Donald Trump declared victory, after revealing that fellow candidate Hillary Clinton had told him that she had conceded the election. At the press conference, Trump said it was time for the nation "to come together as one united people."

In recent weeks, markets both domestically and across the globe had been largely pricing in a victory for Clinton over the Republican nominee. As election results rolled in on Wednesday, global stock markets were extremely volatile in trade. However, U.S. futures had pared losses before the market open and European stocks were off session lows. As a result, fixed income assets fell lower as the panic in stock markets calmed slightly. Bonds are seen as a safe haven in times of economic stress.

Currencies and commodities have been on a roller-coaster ride since the results started rolling in, with the Mexican peso falling more than 12 percent against the U.S. dollar, and oil prices slipping on election jitters.

At 8:55 a.m. ET, U.S. WTI and Brent were lower, hovering at $44.76 and $45.98 respectively. Precious metals saw the opposite reaction, with gold rising almost 5 percent as investors sought safe havens.

When the news surrounding the U.S. election begins to settle down, the Federal Reserve will be back in the minds of investors, with the world wondering whether the central bank will choose to raise interest rates this year.

Ahead of this however, two Fed officials were penciled in to make speeches on Wednesday. Minneapolis Fed President Neel Kashkari said in a speech the Fed needs to earn the public's trust post-election. He did not, however, comment on whether a December rate increase is still on the table, saying the Fed must wait and see what impact Congress and the president-elect will have on the economy before making a decision.

San Francisco Fed President John Williams is expected to speak at the University of San Francisco in the evening.

Investors will be keeping an eye on the speeches for any signals as to what the central bank thinks about the election result, and whether it could influence their path to raising interest rates.

When it comes to data, Mortgage Applications fell 1.2 percent.

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