US Treasury yields slip after tepid auctions

  • The Treasury Department auctioned $21 billion in 10-year notes at a high yield of 2.889 percent. The bid-to-cover ratio, an indicator of demand, was 2.5.
  • "Supply is certainly ramping up. Inflation expectations are near the highest level in 5 years and the Fed of course is letting their Treasury stash run off," said Peter Boockvar of Bleakley Advisory Group.

U.S. government debt yields slipped on Monday following a set of tepid Treasury Department auctions and ahead of Tuesday's key consumer price data.

The yield on the benchmark 10-year Treasury note fell tp 2.868 percent at 3:52 p.m. ET, while the yield on the 30-year Treasury bond also declined to 3.128 percent. Bond yields move inversely to prices.

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

The Treasury Department auctioned $21 billion in 10-year notes at a high yield of 2.889 percent. The bid-to-cover ratio, an indicator of demand, was 2.5. Indirect bidders, which include major central banks, were awarded 66.2 percent. Direct bidders, which includes domestic money managers, bought 6.5 percent.

The Treasury Department also auctioned $28 billion in 3-year notes at a high yield of 2.436 percent. The bid-to-cover ratio of that auction was 2.94. Indirect bidders were awarded 50 percent while direct bidders bought 9.3 percent.

"The auctions seen today are certainly better than the ones of a few weeks ago. That said, demand still seems pretty lackluster considering the multi year highs in yields," said Peter Boockvar, chief investment officer at Bleakley Advisory Group. "The overall supply is certainly ramping up. Inflation expectations are near the highest level in 5 years and the Fed of course is letting their Treasury stash run off slowly but surely."

"I still believe the surprise is to the upside in rates this year," Boockvar added.

Investors will scrutinize consumer pricing data on Tuesday, when the Department of Labor releases its latest CPI reading. Wall Street expects headline CPI at 0.2 percent and so-called core CPI — which excludes volatile crude and food prices — is also expected to rise 0.2 percent.

Last week, President Donald Trump signed two declarations that would implement tariffs on steel and aluminum imports.

The tariffs are expected to take effect in the coming weeks and will put a 25 percent charge on steel, and 10 percent on aluminum — Canada and Mexico, however, are exempt.