Treasury yields bull-flattened on Thursday, with the long end leading gains, as yields held near intraday lows into the close following a solid 30-year note auction.

As crude oil and equities both retreated from near session highs, an early decline in Treasuries was reversed heading into the 1 p.m. bidding deadline, bid-to-cover metrics came in solid, and the awarded yield was in line with the when-issued level at the deadline.

Just after 3 p.m. in New York, Treasury yields were 2 to 7 basis points lower across the curve in a bull-flattening move, with the 2s10s and 5s30s spreads narrowing by 4 basis points and 3 basis points on the day, respectively.

The U.S. 10-year Treasury yield closed around 5.225%, down 6 basis points on the day, outperforming comparable German and U.K. bonds by 8 basis points and nearly 10 basis points, respectively. Most of the gains came before the auction, and the rally was sustained after the results were released.

The auction's awarded yield was 0.1 basis points above the when-issued level; primary dealers were allotted 6.8%, below the recent average of about 10%, indirect bidders received 72.3%, above the 68.6% average, and direct bidders took 20.9%, slightly below the 21.4% average; the bid-to-cover ratio was 2.54x, above average.

Early trading was dominated by rising oil prices, which initially weighed on Treasuries and pressured the market environment ahead of the 30-year auction. Sentiment then reversed after U.S. President Donald Trump said the United States would not attack Iran before the November 3 midterm elections; oil prices fell sharply from their highs, and Treasury yields moved lower.

On the short end, morning flows included a block sale of 100,000 October federal funds futures contracts; in SOFR options, the most notable trade was an add-on risk-reversal structure in the June 2027 tenor.

As of 4:11 p.m. New York time, the 2-year Treasury yield fell 2.1 basis points to 4.7472%; the 5-year yield dropped 4.5 basis points to 4.9817%; the 10-year yield declined 6.1 basis points to 5.2226%; the 30-year yield fell 7.1 basis points to 5.5989%; the spread between 5-year and 30-year yields narrowed by about 2.7 basis points to 61.54 basis points; and the spread between 2-year and 10-year yields narrowed by about 3.8 basis points to 47.33 basis points.