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30-year yield hits highest level since January after $15 billion sale

Bond traders at CME Group
Getty Images

The U.S. bonds market was closed Friday in observance of Veterans Day.

U.S. government debt prices were lower on Thursday as investors continued to digest President-elect Donald Trump's victory over Hillary Clinton in Tuesday's general election, as well as fresh supply.

The Treasury Department auctioned $15 billion in 30-year bonds at a high yield of 2.902 percent Thursday.

The bid-to-cover ratio, an indicator of demand, was 2.11, well below a 10-auction average of 2.30. Indirect bidders, which include major central banks, were awarded 54.5 percent, below a recent average of 62 percent. Direct bidders, which includes domestic money managers, bought 12.5 percent, above an average of 9 percent.

The auction took place following two lackluster sales earlier this week.

The yield on the 30-year Treasury bond traded at 2.917 following the sale and hit its highest level since Jan. 12. The yield on the benchmark 10-year Treasury note was also higher, at around 2.106 percent.


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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On the election front, it was widely expected that if Trump — who met with President Barack Obama on Thursday — won, there would be chaos in markets since Wall Street had been seemingly expecting a Clinton win.

While there's still an edge of uncertainty, on Wednesday markets chose to focus on elements from Trump's acceptance speech, in which he discussed spending on infrastructure projects that could boost growth.

Trump's victory also raised questions as to whether the Federal Reserve would raise rates in December. That said, Lisa Hornby, portfolio manager, fixed income at Schroders said the U.S. central bank should have no trouble raising rates.

"Equity markets and risk markets are very well behaved," she said. "I don't see any reason for the Fed not to raise rates, given what we've seen over the past 24 hours."

On the data front, jobless claims came in at 254,000.