US 30-Year Treasury Auction Delivers Stellar Performance with Strongest Demand Since 2018

The US Treasury's $25 billion 30-year bond auction delivered exceptional performance, yielding 4.750% and stopping through by 2.1 basis points below expectations. The bid-to-cover ratio reached 2.662, marking the highest level since January 2018 and reflecting robust investor demand. Dealers were left with a record low allocation of just 5.88%, indicating strong participation from direct and indirect bidders. This stellar performance contrasts sharply with the weak showing of previous 3-year and 10-year auctions. The strong demand signals investor confidence ahead of delayed CPI data release and supports expectations for lower long-term interest rates. This positive development is bullish for equities while putting downward pressure on the US dollar against other currencies.