Solid $13 Billion 30-Year Treasury Long Bond Auction

US Treasury building
US Treasury building

Today's 30-Year Treasury Bond auction, the long bond auction, managed to look better than yesterday's 10-year Treasury Note auction. Yesterday's tone looked as though it was going to set a dismal tone for longer-term bond yields as thirty-year auctions are generally not participated in by the public as much as various note auctions.

Today's bonds were technically 29-years and 10-months to maturity (November 2042). The 2.75% coupon saw its highest yield bids at 3.070%. The bond prices went off at $93.77221, with a median yield of 3.032% and a low yield of 2.98%. Today's auction was for roughly $13 billion. Some $36 billion was tendered, and primary dealers saw $5.91 billion of their bids accepted. Only $2.163 billion was accepted from direct bidders and $4.916 billion was accepted from indirect bidders.

Yahoo! Finance shows the 30-year bond yield at 3.06% today and the 10-year yield at 1.88%. This would be considered a very good auction, particularly considering a poor 10-year auction yesterday.

Bond yields are higher than they were a month ago but lower than when the surge higher in rates was seen. We have evaluated how to trade the next great short as the Treasury's long bond, but the devil is in trying to figure out just how long it will take for that to unfold.

Filed under: 24/7 Wall St. Wire, Banking & Finance, Bonds