U.S. 30-Year Treasury Bids Unexpectedly Dismal

The demand for U.S. long term debt tender sale was unexpectedly weak, and the yields of long-term U.S. bonds in the secondary market rebounded significantly.

The U.S. Treasury announced a tender sale of $24 billion of 30-year Treasury bonds at 2.000%, 2.4 basis points higher than the pre-issuance yield, the so-called tail of this yield above the pre-issuance yield, the largest since August last year.

Another sign of weak demand for tenders is that the 30-year U.S. bond tender subscription multiple was only 2.193, a record low since February this year, lower than the previous Treasury tender subscription multiple of 2.29 in the same period last month, and lower than the average value of 2.32 times in the previous six.

The indirect buyers, including foreign central banks, were allocated 61.5%, lower than 64% and the six average value of 62.4% in last month’s tender sale of 30-year U.S. bonds; direct buyers, including the Federal Reserve and other U.S. federal government entities, were allocated 16.6%, a record low since November last year; and primary dealers with the obligation to buy all the failed auction Treasuries to prevent abortive auctions were allocated 22.3%, a record low since October last year. 22.3%, a record high since October last year.

After the announcement of the 30-year U.S. bond tender results, the secondary market yield of 30-year U.S. bonds once rose above 2.00%, hitting a new intraday high since last Tuesday, July 6, rising nearly 6 basis points during the day.

The benchmark 10-year U.S. bond yield also jumped, rising above 1.40% at midday, refreshing the week-long high set by the U.S. stock market after the pre-market release of the June U.S. CPI surpassed expectations.