BOND REPORT: Treasury Yields Fall After Auction Of 30-year Bonds

By Sunny Oh Features Dow Jones Newswires

Wholesale prices in September jumped to 0.4%, pushing the annual growth rate to 2.6%, the fastest pace since 2012.

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Treasury yields fell on Thursday after a 30-year bond auction attracted strong demand from investors, pressuring long-dated yields.

What are yields doing?

The benchmark 10-year Treasury yield fell to 2.324%, compared with 2.346% on late Wednesday. The shorter 2-year Treasury note yield ticked lower to 1.509%, from 1.520%, while the 30-year bond yield slipped to 2.852%, versus 2.876%. Bond prices move in the opposite direction of yields.

What drove markets?

A strong auction for $12 billion of 30-year Treasury bonds helped pull yields lower. Incoming supply of government paper can influence trading for Treasurys. A common way to track the success of the sale, the bid-to-cover ratio was 2.53, the highest since Sep. 2015. It indicates the proportion of buyers to the amount available bonds on the block.

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With plenty of Fed officials going on the record, investors gleaned further clues on the path of future monetary policy in the wake of the release Wednesday of the minutes from the central bank's September policy meeting. Former Fed Chief Ben Bernanke and Fed Gov. Lael Brainard participated in a spirited debate on the merits of price-level targeting, which argues inflation should overshoot the 2% target if prices have spent long periods below the desired rate.

See: December rate hike might not be automatic, minutes of last month's meeting show (http://www.marketwatch.com/story/december-rate-hike-not-automatic-minutes-of-last-months-meeting-show-2017-10-11)

What are market participants saying?

"As has been the case for a while now, the auctions in the long-end present a liquidity opportunity for investors," wrote Thomas Simons, senior money market economist for Jefferies.

What economic data is on investor's radar?

What central bankers are saying?

(END) Dow Jones Newswires

October 12, 2017 14:27 ET (18:27 GMT)