Insights 
VT 
US yields have reached new lows for the day, with the 2-year at 4.001%, 5-year at 4.082%, 10-year at 4.479%, and 30-year at 4.956%. This week, the US Treasury plans auctions for 3, 10, and 30-year coupon issues, issuing $58 billion in 3-year Notes on June 10, $42 billion in 10-year Notes on June 11, and $25 billion in 30-year Bonds on June 12.
The 10-year U.S. Treasury yield acts as a benchmark, influencing rates like mortgages and corporate loans. Rising yields often suggest stronger economic growth or inflation, while falling yields may reflect economic concerns or risk aversion. Today’s lower yields come as the 10-year yield remains above its 100-day moving average of 4.386%.
Yield Movements
This yield previously hit a high of 4.809% on January 14 and a low of 3.86% on April 4, and it is above the 50% retracement level of 4.335%. The dollar has moved against major currencies, most notably declining 0.60% against the NZD and 0.07% against the CHF. The potential for yield direction to change depends on breaching specific technical levels.
With yields slipping across the curve, the stage is now set for the Treasury’s supply to provide a test of demand and risk tolerance over successive sessions. Each auction will act as a real-time gauge for investor appetite in different maturity segments, especially considering the recent retreat in yields and their position relative to key technical thresholds.
Looking closely at the 10-year note, it’s traded well above both the 100-day and 50% retracement line from its recent range. Movements above these markers usually attract interest from momentum participants and algorithmic funds that respond to such signals. The yields’ recent decline, paired with these levels remaining intact, may suggest a temporary softness without breaking broader bias for now.
We’ve seen the US dollar lose ground against higher-beta currencies and safe havens alike, which tells us something. It’s not only about yield direction but also expectations of macro data, perhaps even a reshuffling of positioning ahead of perceived turning points or surprises. Among currencies, the sharper drop against the NZD indicates positioning flow likely linked to rate differentials, whereas the softer adjustment versus the CHF points to a mildly defensive tone.
Bond Market Response
For directional trades linked to rates and fixed income, it’s not just the level of yields that matters. It’s the response at supply events, especially in longer-dated tenors, that can shift pricing in swaps and futures. These results may deliver information on whether demand aligns with recent pricing or if the market begins to push back.
Shorter tenors, such as the 2s and 5s, have dipped just beneath round numbers and are moving into territory likely to attract macro attention. If auction coverage comes in soft, pressure may return, undoing some of this week’s compression. However, smooth absorption paired with steady inflation messaging can keep range behaviour intact.
Technicals are starting to form a backdrop again. The 10-year remains capped under its previous yield high from January, and that’s not a small distance from here. With futures having shown consistent reaction at these retracement and moving average levels, sensitivity may increase around auction results.
We’re likely to see increased activity in options and eurodollar strips if the auctions point to either soft or excessive demand—sharp price movement is possible in either case. Traders reacting to these events will need to watch how global participants respond, especially as currency flows have become less predictable day-to-day. Domestic rate pressures are no longer the only driver.
Bond flows and relative value trades may become more responsive to each auction component. It’s also worth noting that the tenor structure of issuance lines up sequentially—front-loaded early week, tapering off by mid-week. Response in 3-year paper could serve as a lead indicator for how the curve absorbs longer maturities.
If the demand is brisk across the curve, we may not see yields push back higher immediately unless macro conditions call for it. A weak showing, particularly in the 10s or 30s, could prompt repricing across multiple products—not only in outright fixed income, but in cross-asset strategies hinged on implied volatility or funding assumptions.
Markets have been learning quickly in recent weeks—not only from data releases but also from secondary price action. What happens around supply next will speak loudly.
