US sells USD 25bln of 30-year bonds at a high yield of 4.750%, Stops through 2.1bps

The recent auction of 30-year bonds demonstrates strong demand, indicated by a bid-to-cover ratio of 2.66x, which exceeds previous averages.

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US sells USD 25bln of 30-year bonds at a high yield of 4.750%, Stops through 2.1bps

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  • High Yield: 4.750% (prev. 4.773%, six-auction avg. 4.759%): WI 4.771%
  • Tail: -2.1bps (prev. -0.1bps, six-auction avg. 0.5bps)
  • Bid-to-Cover: 2.66x (prev. 2.36x, six-auction avg. 2.34x)
  • Dealers: 5.9% (prev. 11.2%, six-auction avg. 12.4%)
  • Directs: 24.2% (prev. 23.5%, six-auction avg. 23.9%)
  • Indirects: 69.9% (prev. 65.4%, six-auction avg. 63.7%)
Context

The yield of 4.750% is slightly lower than prior auctions, suggesting a modest easing in investor yield expectations, while a negative tail of -2.1bps indicates that the bonds sold at a narrower discount than previously, highlighting confidence in the issuance. Overall, this could imply a supportive backdrop for long-term rates and could stabilize the broader fixed income market.

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