Short- and medium-term U.S. Treasuries posted modest gains on Thursday, while long-term bonds were largely flat, following a wave of risk-off sentiment that rattled U.S. equity markets during the early session. Concurrently, many commodities relinquished their earlier advances, and the VIX index surged, further amplifying the safe-haven appeal for shorter-duration government debt. A $44 billion auction of 7-year notes attracted demand that was broadly in line with expectations.

Shortly after 3 p.m. New York time, yields on 2-year to 5-year U.S. Treasuries were down approximately 2 basis points for the day. The 2s10s yield spread widened by about 1 basis point, while the 5s30s spread widened by roughly 2 basis points. The 10-year Treasury yield hovered near 4.23%, registering a decline of less than 2 basis points on the day.

The high yield awarded in the 7-year Treasury auction came in 0.4 basis points above the yield prevailing in the when-issued market, an outcome that had a negligible impact on trading. Primary dealers were allotted 10.9% of the offering, a share that exceeded the recent average of 10.2%. Direct bidders received 22.2%, which was below the six-auction average of 28%. Indirect bidders took down 66.9%, a proportion higher than the 61.8% average from the prior six auctions.

As of 3:47 p.m. New York time, the yield on the U.S. 2-year Treasury note was 3.557%.

The yield on the U.S. 5-year Treasury note was 3.8123%.

The yield on the U.S. 10-year Treasury note was 4.2313%.

The yield on the U.S. 30-year Treasury bond was 4.853%.

The yield spread between U.S. 2-year and 10-year notes was 67.228 basis points.

The yield spread between U.S. 5-year notes and 30-year bonds was 103.888 basis points.