30-Year Bond Auction Yield Rises to 5.618% From 5.308% in September

The Treasury Department sold $22 billion of reopened 30-year bonds on Thursday, Oct. 8, at a high yield of 5.618%, according to TreasuryDirect auction results. That is 0.310 percentage point above the 5.308% the government paid when it sold the same bond on Sept. 10. Bidders offered $2.54 for every dollar sold, down from $2.61 last month.

The bonds carry a 5-1/8% coupon and mature Aug. 15, 2056. They sold at a price of 92.889131 per $100 of face value and will be issued Oct. 15, Treasury said.

30-year bond auction results: October vs. September

Measure	Oct. 8	Sept. 10
Offering amount	$22 billion	$22 billion
High yield	5.618%	5.308%
Median yield	5.567%	5.250%
Allotted at high yield	26.77%	64.29%
Price per $100	92.889131	97.262274
Bid-to-cover ratio	2.54	2.61
Primary dealers, share of competitive awards	6.8%	2.2%
Direct bidders, share	20.9%	18.3%
Indirect bidders, share	72.3%	79.5%

Source: TreasuryDirect auction results. Shares are calculated by Capital Finance Bureau from accepted competitive tenders.

Bids totaled $55.9 billion, Treasury said. Primary dealers were awarded $1.49 billion of bonds, up from $484.8 million in September. Indirect bidders were awarded $15.87 billion, down from $17.45 billion. The Federal Reserve's portfolio added $522.5 million on top of the offering, bringing total accepted bonds to $22.52 billion. In September the Fed took none.

Was demand for the 30-year bond weak?

It was softer than in September by several measures. The bid-to-cover ratio fell to 2.54 from 2.61. Indirect bidders took a smaller share, and primary dealers were left with about three times their September share. At the 10-year sale on Oct. 7, dealers took 2.5%.

How the week's auctions compare

The 30-year sale finished a week in which Treasury sold $119 billion of coupon debt, and each auction cleared at a higher yield than in September.

Auction	Date	High yield	September high yield	Bid-to-cover
3-year note, $58 billion	Oct. 6	4.932%	4.474%	2.62
10-year note reopening, $39 billion	Oct. 7	5.300%	4.834%	2.77
30-year bond reopening, $22 billion	Oct. 8	5.618%	5.308%	2.54

Source: TreasuryDirect auction results.

Our earlier briefs cover the 3-year note auction and the 10-year note auction alongside the Fed minutes.

Where did Treasury yields close on Oct. 8?

Longer-term yields fell on Thursday. The 30-year par yield closed at 5.60%, below the auction's 5.618% high yield, which was set at the 1 p.m. ET bidding deadline, according to Treasury data.

Maturity	Sept. 30	Oct. 7	Oct. 8
2-year	4.88%	4.77%	4.75%
10-year	5.29%	5.28%	5.22%
20-year	5.68%	5.71%	5.64%
30-year	5.64%	5.67%	5.60%
10-year minus 2-year	0.41	0.51	0.47

Source: U.S. Department of the Treasury, daily par yield curve rates.

The 10-year yield closed 0.09 percentage point below its Oct. 5 close of 5.31%, covered in our 10-year yield report. The sale came the day Fed Governor Christopher Waller said he expects more rate hikes. More coverage is in the Capital Markets section.