The U.S. Treasury’s auction of $70 billion in 5-year notes drew a high yield of 5.033%, the steepest since 2006 and above the 5.002% pre-auction trading yield at the 1 p.m. New York deadline, signaling weaker-than-expected demand. This marks the 11th consecutive soft result for the 5-year tenor.

At the time of the auction, the 5-year yield had already risen about 15 basis points during the session. Following the release of the results, selling pressure intensified, pushing the yield above 5% and up nearly 20 basis points from the prior day’s level. The yield curve flattened further, with the 5s/30s spread narrowing to its intraday low.

Primary dealers took down 15.8% of the offering, the largest share in two years, while indirect bidders saw their allocation drop to 54.3%, offsetting a rise to 29.9% among direct bidders. The bid-to-cover ratio came in at 2.21 times, below the average of 2.33 times seen over the previous six auctions.