By coinnews 
00:00 Jared Blikre
On Monday, the US 30-year Treasury yield, that’s the interest rate demanded for 30-year debt issued by Uncle Sam, it punched north of 5% for the first time in years. And investors are now laser focused on bond auctions as a key to determining the next move for stocks. I’m Jared Blikre, host of Stocks and Translation. First off, what is a Treasury auction? It is an event where the US government sells bonds and bills, IOUs basically, to raise cash for federal spending at an interest rate determined by investor demand. So, Treasury auctions are a regular event. Treasury bills which mature in a year or less, they’re auctioned weekly. Longer term notes and bonds are auctioned monthly. Key longer term auctions like the three, 10, and 30 year, they are happening next week, and that’s what traders are watching closest to gauge investor appetite. And keep this in mind, this evening isn’t even the full list. We got tips, we got floating rate notes and other bills that happen separately. So, who’s buying this? Indirect bidders, these are mostly foreign central banks and big overseas investors. They are a critical measure of global confidence in the US debt market. Direct bidders include US-based fund managers and everyday investors using treasury uh using treasury direct, although that’s actually a smaller slice, typically under 1%. Finally, we have primary dealers. Those are the big banks required to buy whatever remains and they act as a backstop, and they are closely linked with Federal Reserve operations. And here’s why the bond auction breakdown matters. Foreign participation in the key 30-year auction is sliding, hovering near 60% lately. It’s down from over 70% recently. And this downward drift, it signals cautious sentiment around the world. Lower uh foreign demand, that means higher borrowing costs and rising pressure on markets. Auction results, they send immediate signals. Low demand, prices fall, yields spike, which means caution, with stocks often responding negatively. High demand, prices rise, yields dip and this can signal confidence supporting stocks. And remember, bond prices and yields they move in opposite directions. So each auction, it’s a real-time risk gauge. And here’s a big picture. Rising auction yields directly impact debt service costs, which are now surging towards record highs. This isn’t abstract. Every dollar servicing debt is one less dollar for other critical spending and this influences long-term economic economic health and also market stability. So bottom line, Treasury auctions are not just about bonds, they are about confidence, costs and markets, and that’s why investors and traders, they can’t afford to look away. All right, stay tuned for more episodes of Stocks and Translation, new episodes each Tuesday and Thursday, wherever you find your podcasts. Back to you guys.
05:27 Speaker A
Jared, thank you so much. As always, love that we’re talking bond market auctions. Appreciate it.