U.S. Treasury’s biggest-ever 10-year auction garners solid demand

 The US government sold a record $42 billion of 10-year notes Wednesday at a lower-than-anticipated yield, a sign of investor confidence that the Federal Reserve will pivot to interest-rate cuts this year in response to a growth slowdown.

The notes were awarded at 4.093%, compared with a when-issued yield of about 4.105% moments before 1 p.m. New York time, the bidding deadline. The lower yield indicates stronger demand than traders anticipated.

The auction result broke a streak of tails - or a weaker result for the previous four monthly sales - and US Treasuries as a whole held steady as the details were absorbed.

Before the auction, Treasury yields were briefly driven to session lows by the latest bout of weakness in US regional bank shares led by New York Community Bancorp, whose loan portfolio has been hurt by rising interest rates. At the same time, the S&P 500 traded at record-high levels, highlighting crosscurrents in the US economy. Those were reflected in the Treasury market in the past week, when strong January employment data touched off the biggest two-day selloff in more than a year.