Impressive 20Y Auction Sees Jump In Foreign Demand, First Stop Through In Months

Bonds are attracting investors as a safe haven due to reduced market risk in high-beta stocks. The 20-year bond auction was the primary focus, with the reopening of 19-year, 10-month paper. This auction saw strong demand, primarily from foreign investors, and went smoothly. The high yield of 4.506% was higher than the previous month's but stopped through the when issued yield. The bid-to-cover ratio increased, though it was slightly below the average. Direct investors purchased a significant portion, leaving dealers with a typical amount. The auction's success was anticipated given the stock market's downturn. Yields declined in response to the positive bond auction results. This indicates a flight to safety, with investors favoring bonds over equities.