Treasury Set to Sell $42B in 10-Year Notes as Bond Yields Drift Lower
The U.S. Treasury will return to market today with a $42 billion auction of 10-year notes at 1:00 p.m. ET, a key test of demand across the benchmark maturity. With government bond yields easing after Monday’s holiday closure, fixed-income traders will be watching the sale closely for signals on investor appetite and future funding costs.
Today’s reopening will be judged against six-month averages for auction performance. Recent benchmarks show a modest stop-through of 0.3 basis points, a bid-to-cover ratio of 2.54, and a buyer mix led by indirect bidders at 70.2% (typically foreign institutions), followed by direct bidders at 20.1% (domestic accounts) and primary dealers filling the remaining 9.7%. Strong participation—particularly from real-money and international buyers—tends to support prices and push 10-year Treasury yields lower.
The market backdrop is supportive: yields are broadly softer after the Veterans Day closure, with the 2-year at 3.559% (-3.1 bps), 5-year at 3.659% (-5.1 bps), 10-year at 4.057% (-5.0 bps), and 30-year at 4.653% (-4.9 bps). Monday’s 3-year note auction drew solid demand from both domestic and overseas investors, setting the stage for today’s 10-year issuance. Auction metrics, including the bid-to-cover ratio, tail, and allocation split among indirect, direct, and dealer bidders, will be closely monitored for direction on Treasury yields and risk sentiment.
Key Points – Treasury to auction $42 billion in 10-year notes at 1:00 p.m. ET – Six-month averages: tail -0.3 bps, bid-to-cover 2.54x – Allocation averages: indirect 70.2%, direct 20.1%, dealers 9.7% – Yields softer: 2Y 3.559%, 5Y 3.659%, 10Y 4.057%, 30Y 4.653% – Strong demand typically supports prices and lowers yields – Recent 3-year sale saw robust participation from domestic and international buyers
