10Y Note Auction & Why Markets did %10 Movement with Last Data?

Hello Traders tomorrow we have 10-Year Note Auction data and I wanted to prepare a nice little information for you about this topic because the data released last month showed an immediate 10% increase and from what I saw, many people had no idea what was happening.

📌 What is the 10-Year Note Auction?

The U.S. government regularly issues 10-year Treasury notes to finance its budget. The auction result reflects investor demand and long-term interest rate expectations. The yield (interest rate) that results from the auction is a key benchmark for financial markets globally.

🔄 Connection to U.S. Stocks and EUR/USD

🟢 If Demand Is Strong (Yields Stay Low):

• Investors are eager to buy U.S. debt, pushing prices up and yields down.
  
  
• This indicates confidence in the U.S. economy and little concern about inflation or rate hikes.
  
  
• Stock markets generally react positively.
  

🔴 If Demand Is Weak (Yields Rise):

• Investors require higher returns, possibly due to inflation fears or policy tightening expectations.
  
  
• This pushes yields up, increasing borrowing costs and reducing the attractiveness of risk assets.
  
  
• Stocks typically decline, and the dollar strengthens.
  

💱 Effect on EUR/USD

🟢 If Yields Rise:

1. U.S. dollar becomes more attractive due to higher returns.
   
   
2. Investors buy USD to invest in Treasuries.
   
   
3. EUR/USD typically falls.
   

🔴 If Yields Fall:

1. Lower yields reduce the appeal of the dollar.
   
   
2. Investors may move capital elsewhere.
   
   
3. EUR/USD tends to rise.
   

🗓️ Latest 10-Year Treasury Auction – April 9, 2025

• Auction Size: $39 billion
  
  
• High Yield: 4.435%
  
  
• Expected (WI) Yield: 4.465%
  
  
• Outcome: Strong demand – yield came in lower than expected.
  

📊 Post-Auction Market Reactions
🔹 10Y Treasury Yield:

• Before auction: ~4.466%
  
  
• After auction: Dropped to ~4.38%
  
  
• ➝ Reflects strong investor demand and confidence in long-term stability.

🔹 S&P 500 Index:

• Lower yields reduce borrowing costs and support equity valuations.
  
  
• Investors often shift toward riskier assets like stocks when yields fall.
  
  
• The S&P 500 responded positively after the auction.
  

🔹 EUR/USD:

• Falling yields reduce the dollar's relative appeal.
  
  
• This may push EUR/USD higher, depending on other macroeconomic influences (like ECB policy or geopolitical risks).
  

✅ Conclusion
The April 9, 2025, 10-year Treasury auction showed strong demand with a yield lower than market expectations. This led to a drop in yields, a positive reaction in U.S. stock markets, and potential downward pressure on the dollar, which may support EUR/USD.