The two-year finished down 2/32 for the day, and the ten-year was lower by 1&10/32. The benchmark curve steepened 15 basis points, and currently sits at +234 bps. A basis point represents .01%.Today’s 30-year Treasury auction confirmed the fears of many traders who kept bonds from rallying earlier this week on speculation that demand for the long bond would not be met. $14 billion in new 30-year Treasuries were issued today to wrap up the government’s refunding activity for the month. The bid/cover ratio on the auction was 2.14, well under the 2.4 from last month’s 30-year auction, and came in at a yield of 4.288% compared to a 4.205 market rate before the auction. The 30-year bottomed out at a yield of 4.309% shortly after results were released, but rallied to end the day at 4.303%.
Stress Test
Below are the official results of the Treasury’s Supervisory Capital Assessment Program (SCAP). They are more or less in line with what has been leaked the past few days, except for PNC and Morgan Stanley who were previously expected not to need any.
Have a great evening.
Cliff J. Reynolds Jr., Junior Analyst
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