The 30-year yield eases from a 2002 high as Treasury's sale week begins
The 30-year Treasury yield eased to 5.626% on Tuesday, October 6, from a Monday high of 5.702% last seen in 2002, ahead of a $119 billion sale of notes and bonds.
Key takeaways
The interest rate on 30-year US government debt eased to 5.626% before the open, from a Monday high of 5.702%, the highest since 2002. The iShares 20+ Year Treasury Bond ETF TLT, which holds long-term US government bonds, was indicated 0.6% higher.
TLT closed Monday at $77.11
Treasury sells $119 billion of notes and bonds over the next three days. Today it is $58 billion of 3-year notes. Wednesday it is $39 billion more of an existing 10-year note, and Thursday $22 billion more of an existing 30-year bond.
Last month is the comparison for today. On Tuesday, September 8, the 3-year note was awarded at a high yield of 4.474%, and buyers bid 2.72 times the amount on offer.
Japan ran the overnight version of that test. Japan's Ministry of Finance set the coupon, the stated interest rate, on a new 10-year bond at 3.1%, the first time that coupon has topped 3% since August 1996. The sale cleared at a yield of 3.103%.
Buyers bid 3.76 times the amount awarded, above 3.29 at the previous sale and a 3.21 average over the past year.
Oil was lower at the same time. West Texas Intermediate, the main US oil price, was at $87.45 a barrel at 6:52 a.m. Eastern time, down 2.2%. The United States Oil Fund USO, which holds oil futures, was indicated 1.9% lower, a smaller move than the oil price. On Friday the Group of Seven agreed to release 100 million barrels of diesel and crude from emergency stocks.
The SPDR S&P 500 ETF SPY, which tracks the S&P 500, was showing a 0.3% gain before the open. On Monday the Nasdaq Composite rose 1.1% to a record close, the same day the 30-year yield touched that high.
Eric Diton, president and managing director at The Wealth Alliance, said the Nasdaq "is being driven by a handful of the largest stocks: Nvidia, Microsoft, Meta and Tesla."
The minutes of the Fed's September meeting are due Wednesday, the day of the 10-year sale.
This afternoon's 3-year result is the one to watch, set against September's 4.474% yield and bids of 2.72 times the notes on offer.
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Frequently asked questions
Where did the 30-year yield settle?
It eased to 5.626% before the open, from a Monday high of 5.702%.
What is Treasury selling this week?
Treasury sells $119 billion of notes and bonds over the next three days, starting with $58 billion of 3-year notes.
How did long-term Treasury funds trade?
The iShares 20+ Year Treasury Bond ETF was indicated 0.6% higher.
What happened at the last 3-year note sale?
On September 8 the 3-year note was awarded at a high yield of 4.474%, and buyers bid 2.72 times the amount on offer.
