The dollar rallied in overnight trading which sent risk assets tumbling. Stock buyers eagerly bought the dip at the market open, reversing some of the overnight declines. Treasury yields were flat in overnight trading until a few minutes before markets opened when sellers pressed yields higher. Yields have been fading their opening move higher in early trading.
Today’s 3-year $58 billion Treasury Note auction was met with strong demand as foreign bidders took 52.2% of the auction and domestic bidders 14.6% of the auction, leaving securities dealers with 33.2% or $19.231 billion. Treasury yields rose following the auction.
Buyers were unable to hold on to their intra-day rally as stocks closed lower on the day. Treasury yields closed slightly higher and bond buyers fended off the early morning sellers. The dollar, which most are predicting will further decline, has rallied for three consecutive days to close higher.