Treasury yields fall after auction of 20-year bonds sees strong demand

A batch of $16 billion in freshly issued 20-year Treasury bonds saw strong demand on Monday, pushing Treasury prices higher. Investors paid a slight premium, as the yield on bonds purchased at the auction was 0.9 basis point lower than what investors had been paying in the secondary market, according to an analysis of Treasury Department data by Ben Jeffrey, a rates strategist at BMO. The bid-to-cover ratio, another measure of demand, came in at 2.58, compared with an average of 2.52. Another sign of a healthy auction was that dealers were left with a smaller-than-average haul, as demand from direct and indirect bidders was higher than usual. Treasurys saw a slight pop after the auction, as yields on the 10-year note and 30-year Treasury bond fell. Bond yields move inversely to prices, falling as prices increase. The yield on the 10-year was down 2.3 basis points at 4.416% and that of the 30-year bond was off 3 basis points at 4.565% shortly after the results were announced, according to FactSet data, having erased a slight increase from earlier in the session.