Bonds End Little Changed

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U.S. Treasuries knocked around little changed much of the session Tuesday with an improved run of low-tier data and a well-received three-year auction resulting in muted market reactions. Traders were looking out to the week’s remaining, and more significant, 10- and 30-year auctions while eyeing stock markets as they continue to dance with record highs.

The 30-year closed near 2.97% from an overnight low yield/high price 2.956% and 2.965% Monday. The 10-year settled little changed near 2.38% from a 2.375% close. The five-year also went out little changed at 1.879% versus a close near 1.88%. The two-year was also flat at 1.194%.

The curve trade, like its inputs, was little changed with the yield differential between the two- and 10-years near flat at 1.18 plus while the yield spread between the five- and 30-years settled in a slightly steeper slope near 1.09 from 1.08 plus Monday.

The $24 billion three-year sale saw foreign buyers stepping back in to take the biggest chunk since September while overall demand was the highest since August. Buyers accepted a significantly lower yield to own the threes, with a high yield at 1.472% versus a reported 1.478% to 1.480% at the deadline, marking the highest rate since April 2010.

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