U.S. Treasuries ended mixed Tuesday having opened better following Europe’s lead higher while the market was supported by corrective activity after the 10-year traded the highest yield/lowest price since September 2014 Monday. The better-than-expected auction offered a brief rally, but the market continued to eye energy and equities for direction while the Federal Open Market Committee rate hike and statement due late Wednesday along with the Summary of Economic Projections (SEP).
The 30-year closed near 3.145% from a high at 3.115% and 3.16% close Monday. The 10-year settled near 2.479% from a 2.48% close, the lowest close since mid-2015. The five-year went out near 1.91% from 1.89% Monday. The two-year lagged, heading out at 1.17% from a 1.14% close.
The curve trade flattened with the yield spread between the two- and 10-years near 1.31 from 1.33 plus while the yield differential between the five- and 30-years was 1.24 from a close near 1.27 plus.
The 30-year auction beat lowered expectations with buyers accepting a lower payout, as the sale was awarded at 3.152% against the when-issued 3.17% reported at the deadline. Foreign demand hurdled back to 63.9% versus 54.4% Nov. 10, while primary dealers were left to clean up the lowest level level since July.