Strong demand for the US $22 billion 30-year Treasury bond auction

The US $22 billion 30-year Treasury bond auction saw strong demand, providing relief for the long end of the Treasury market for the second consecutive day. The auction yield was lower than traders had anticipated, indicating robust investor appetite. According to BMO, the proportion taken by primary dealers required to participate in the auction dropped to a record low, meaning more bonds were purchased by end investors. Following the auction, the yield on the 30-year US Treasury fell the most, dropping to around 5.33%, though it was still noticeably higher on the day; the 10-year yield was little changed at 4.924%. Short-term US Treasuries were not boosted by the auction, with yields continuing to edge higher, indicating that the strong demand mainly eased sell-off pressure on long-term bonds. Recently, long-term US Treasuries have remained under pressure from concerns over the fiscal deficit, debt supply, and inflation.