There's Another Big Treasury Auction Today And It Will Test Investor Demand Amid Tariff Volatility -- MarketWatch

The next major test of investor appetite for U.S. government debt is set to arrive in just a few hours via a $22 billion auction of 30-year Treasury bonds, just one day after a shockingly strong $39 billion 10-year auction.Read: Buyers show up in force for Treasury's 10-year auction, shocking bond tradersThe results of Thursday's 30-year auction, which land just after 1 p.m. Eastern time, have the potential to either confirm or dash the current thinking of bond-market participants, which is that there's still plenty of demand for long-dated Treasurys despite tariff-driven volatility.

The 30-year "long bond" began rallying overnight and into much of Thursday morning's New York session, before selling off slightly. The mild selloff sent its yield up by a few basis points to 4.81%, from an almost two-month high near 4.79% reached on Wednesday. Ahead of this afternoon's auction, Thursday's broader trading session was marked by a next-day analysis of President Donald Trump's 90-day delay of reciprocal tariffs against most countries. Strategist Marc Chandler at Bannockburn Capital Markets pointed to still-existing charges against China that continue to pose a threat to U.S. growth and price stability. Jason Pride, chief of investment strategy and research at Glenmede, said the president's lower 10% universal tariff for most countries can still have a material impact on inflation that may show up in the next few consumer-price index reports.Thursday's release of CPI data for March, which reflected falling consumer prices on a headline monthly basis, appeared to do little to suppress concerns about the inflationary impacts of U.S.-imposed tariffs going forward. All three major stock indexes fell Thursday from the open, following Wednesday's historic rally, which handed the Dow Jones Industrial Average DJIA, S&P 500 SPX, and Nasdaq Composite COMP their biggest one-day point gains on record. Most Treasury securities were rallying as the ICE U.S. Dollar Index DXY dropped 1.7%. Crude oil (CL00) plunged 4.8%, while gold (GC00) rose 2.9%."Today's 30-year auction will gauge investor appetite for duration, particularly given the poor performance of Treasuries amid this week's equity market volatility," said Deutsche Bank strategist Steven Zeng and researcher Matthew Raskin. They added that the last two 30-year auctions produced slightly below-average demand from end-users.Meanwhile, BMO Capital Markets strategists Ian Lyngen and Vail Hartman said that "foreign participation in the 30-year sector isn't as significant as it is in the 10-year, which makes the final auction of the week slightly less concerning."

-Vivien Lou Chen

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April 10, 2025 11:16 ET (15:16 GMT)

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