INSTANT VIEW-U.S. Treasury auction allays concern about selloff

NEW YORK, April 9 (Reuters) - U.S. Treasuries, the bedrock of the global financial system, were hit by fresh selling pressure earlier Wednesday, in a sign that investors were dumping their safest assets after the U.S. roiled markets by introducing sweeping trade tariffs.

MARKET REACTION:

TREASURIES: U.S. Treasury benchmark yields declined after a government auction of $39 billion 10-year notes on Wednesday, suggesting good demand. The auction came amid a bond market rout that was sparked by the tariffs and prompted forced selling and a dash for cash.

COMMENTS:

AYAKO YOSHIOKA, PORTFOLIO CONSULTING DIRECTOR, WEALTH ENHANCEMENT GROUP, LOS ANGELES

"The bid to cover ratio in the auction was strong. First and foremost, it was a good auction and demand was there. Th small negative was the number of direct bidders."

"The good demand has to do with the fact you did get higher yields, so treasuries were looking a bit more attractive than prior to the announcement of reciprocal tariffs. It provided an attractive entry point for insurance companies, banks."

JAMIE COX MANAGING PARTNER, HARRIS FINANCIAL GROUP, RICHMOND VA

"This was an A+ auction today that should sideline the concerns of systemic risk in the system."

JEFFREY PALMA, HEAD OF MULTI-ASSET SOLUTIONS AND MACRO RESEARCH, COHEN & STEERS, NEW YORK

"The 10-year Treasury auction went better than expected certainly against a backdrop where the bond market had been trading very weakly over the course of the last week. That strong result at least in the short run is a positive for sentiment. The longer-term questions still remain around the impact from tariffs and so forth on growth. But at least for the short run it’s a bit of welcome good news against what has been a tough backdrop."

VAIL HARTMAN, ANALYST ON U.S. RATES STRATEGY TEAM, BMO CAPITAL MARKETS

"Today's 10-year auction was very strong... Before the auction, 10-year notes were under pressure with yields just off the session peak of 4.51% and rates headed into 1pm EST roughly 17 bp higher on the day. Since the results, Treasuries have rallied in the follow-through."