Treasury sells $39B in 10-year notes at 5.300% yield

The U.S. Treasury auctioned $39 billion of 10-year notes.

• The WI level at the time of the auction was 5.317%.

• The high yield came in at 5.300%.

• Another reading of the WI level at auction time was 5.317%.

• The stop-through was 1.7 basis points compared to an average of 0.3 basis points.

• The bid-to-cover ratio stood at 2.77 times, versus the average of 2.54 times.

• Direct bidders took 17.2% of the issue, slightly above the 17.0% average.

• Indirect bidders accounted for 80.34%, exceeding the 74.1% average.

• Dealers received only 2.54%, well below the 8.8% average.

The auction received a grade of A.

Overall, the auction was strong. Buyers agreed to a yield 1.7 basis points lower than the WI level, signaling demand. The bid-to-cover ratio comfortably beat the average, and indirect bidders snapped up 80.34% of the notes. Direct demand also edged above the average. That left dealers with just 2.54%, far below the 8.8% average and possibly a record low. The sizable stop-through, robust demand, and minimal dealer allocation support the A grade.

U.S. yields fell to session lows, with the two-year at 4.78%, the 10-year at 5.290%, and the 30-year at 5.670%.

Stocks stayed under pressure. The Dow dropped 0.69%, the S&P 500 fell 0.28%, and the NASDAQ lost 0.40%. The Russell 2000 was the worst performer, declining 1.18%, while the NASDAQ 100 fell 0.34%.