US Treasury Auction Sees Weak Demand in 30-Year Bonds.

The US Treasury's auction of new 30-year bonds showed weak demand, with a bid-to-cover ratio at 2.27, its lowest level since November 2023. This led to a sell-off in US 30-year Treasuries, pushing yields 1.6 basis points higher to 4.827%. The auction follows an equally weak 10-year sale on Wednesday, suggesting low appetite for new issuance.

The US Treasury's auction of new 30-year bonds on Thursday, July 2, 2025, demonstrated weak demand, with a bid-to-cover ratio of 2.27, the lowest since November 2023. This was reflected in a sell-off of US 30-year Treasuries, pushing yields 1.6 basis points higher to 4.827% [2]. The auction follows an equally weak 10-year sale on Wednesday, indicating a low appetite for new issuance.

The 30-year bond was awarded at a yield of 4.813%, 2.1 basis points above the pre-auction yield of 4.792%. This marked a notable tail compared to recent auctions, but was lower than the 4.889% stop-out rate at the previous reopening. Dealers, representing buyers of last resort, absorbed 56.9% of the bonds, while indirect bidders, often representing foreign central banks, took 59.5% of the issue. Direct bidders were awarded 23.0%, slightly below their six-month average [2].

Following the sale, 30-year bonds were quoted at 4.828%, climbing from pre-auction levels. The market digested weaker demand for the long bond amid ongoing uncertainty about the outlook for inflation and Federal Reserve policy. The Treasury is expected to sell $67 billion in bond auctions this week, including $42 billion in 10-year notes on Wednesday and $25 billion in 30-year bonds on Thursday [3].

The auction results come after the 10-year Treasury yield rose ahead of these bond auctions, climbing more than 3 basis points to 4.228% and the 30-year Treasury bond yield climbing more than 3 basis points to 4.807%. The rise in yields follows the release of the ISM non-manufacturing purchasing managers' index, which fell to 50.1 in July, below expectations, and indicated a contraction in the employment index [3].

The Treasury's weak auction results suggest that investors are cautious about the outlook for the economy and the Federal Reserve's policy. The auction results also highlight the ongoing uncertainty about the outlook for inflation and the Fed's response.

References:
[1] https://www.marketwatch.com/livecoverage/stock-market-today-dow-s-p500-nasdaq-extend-rebound-as-bond-yields-steady-palantir-earnings/card/1-year-treasury-yield-leads-modest-rise-in-rates-ahead-of-58-billion-note-auction-8W53AW78PsnWfVddbuXs
[2] https://www.investing.com/news/economy-news/us-treasury-sells-25b-of-30y-bonds-with-21bp-tail-as-demand-weakens-4177909
[3] https://www.cnbc.com/2025/08/06/10-year-treasury-yield-ticks-higher-ahead-of-bond-auctions.html