Longer term interest rates are moving to the high of the day after a poor 30 yr bond auction. The yield of 1.406% was a full 2 bps above the when issued. The bid to cover of 2.14 was the lowest since July 2019 and well below the one year average of 2.35. Dealers got stuck with 28% of the supply, the most since July 2019.
In response, the 10 yr yield is now just below .70% while the 30 yr yield is higher by 3 bps and up by 20 bps in just the last 5 trading days to the highest since early July at 1.40%. Long duration is at risk here I believe.
Not helping the demand for very long term bonds is the continued rise in inflation expectations in the TIPS market.
30 yr yield
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.