The US Treasury's auction of $39 billion in 10-year notes met with surprisingly strong demand, with the high yield set at 4.834%—the highest mark since 2007.

This result came in below the 4.849% pre-auction trading yield at the 1 p.m. deadline in New York, indicating that investor interest was firmer than anticipated. Leading up to the auction cutoff, yields on the 10-year note had climbed roughly 5 basis points for the day.

Primary dealers absorbed just 4.3% of the sale, landing among the lowest allocations on record. Indirect bidders, a category that includes foreign central banks, took down a hefty 79.25%, while direct bidders accounted for 16.5%.

The bid-to-cover ratio, a key gauge of demand, reached 2.71 times—the strongest level since 2016 and well above the 2.52-times average seen across the previous six reopenings.