3-Year Treasury Auction Signals Lower Yields Ahead

The Treasury 3-year note auction results indicate a positive outcome, with the awarded yield coming in lower than the bidding deadline, supporting Treasury prices despite the supply.
Dealers received a lower allotment at 14.9%, with indirect bidders awarded 65.5% and directs taking 19.6% of the auction. The bid to cover ratio was 2.63, the highest since January, reflecting strong investor interest.
The successful auction reinforces the recent price action trend, maintaining a bias towards lower yields, in line with Fed Chair Jerome Powell's recent comments on delaying rate hikes.