US 3-Year Auction High Yield Rises, Demand Prints Higher
The US Treasury’s 3-year auction hit a high yield of 1% on Tuesday, up from the 0.75% high in the previous auction. The bid to cover ratio for the auction was 2.43, ahead of the 2.33 ratio in the previous auction. Dealers represented 59.42% of the bids, with direct bidders at 12.28% and indirect bidders at 28.3%.
For takedown, bidders took 29.81%, with direct bidders at 18.01% and indirects were awarded 52.17%.
Elsewhere, stocks jumped midday for a second day as technology shares rallied and crude oil extended its gains as concern over omicron, the newest COVID-19 strain, eased and data showed that the trade deficit narrowed.
The Dow Jones Industrial Average climbed 1.5% to 35,754.88, with the S&P 500 up 2.2% and the Nasdaq Composite 3.2% higher. Consumer discretionary was the second-biggest gainer followed by energy, with all sectors in the green.
The 10-year US Treasury yield jumped 3.3 basis points to 1.47%.
Shares of growth companies that have been hit following the omicron scare and expectations the Federal Reserve will taper its asset purchases quicker than expected rallied on Tuesday afternoon.
Anthony Fauci, the chief medical adviser to President Joe Biden, told Agence France-Presse that the new variant is ‘almost certainly not more severe than delta.
“The most serious concerns about the omicron variant of coronavirus, which had triggered [last week’s] price slide, have evaporated for the time being,” Commerzbank analyst Carsten Fritsch said in a note.
“Though South Africa, where the variant was discovered, has reported a significant rise in new cases, the disease appears to be milder than with the previously dominant variant.”
West Texas Intermediate crude oil jumped $3.21 to $72.67 a barrel, following a rise on Monday.
The US trade deficit narrowed to $67.11 billion in October from an $81.44 billion gap in September, a smaller deficit than the $66.8 billion expected in a survey compiled by Bloomberg.
The deficit was the lowest in six months as exports hit a record, driven by shipments of crude oil, civilian aircraft, and industrial machines.
China, the world’s second-largest economy after the US, released its November trade data Tuesday. Its trade surplus shrank more than forecast to $71.7 billion and while the 22% year-over-year surge in exports was sizable, it was down from October’s jump of over 27%.
Imports, however, beat expectations, jumping almost 32% year-over-year, primarily on the back of energy products. # US 3-Year Auction High Yield Rises, Demand Prints Higher
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