Last night's 10-year U.S. Treasury auction results sent a positive signal: 1) The $39 billion 10-year Treasury auction had a winning yield of 5.3%, lower than the pre-issuance rate, i.e., below market pricing expectations. 2) The bid-to-cover ratio was 2.77x, significantly higher than the 2.54x average of the past six auctions. 3) Non-dealer investor participation hit a record 97.5%, with indirect bidders—representing foreign central banks, international monetary authorities, and overseas institutional investors—taking 80.3%, the fourth-highest in history, showing exceptionally strong foreign demand. Some of you might wonder: how significant are these auction results? The 5.3% auction yield is the highest since November 2000. Domestic direct bidders in the U.S. and indirect overseas bidders snapped up 97.5% of the Treasuries in this auction. Meanwhile, primary dealers—large banks responsible for underwriting any unsold bonds—only accounted for 2.5%, the lowest since 2003. This sends a valuable signal: long-term yields around 5.3% are starting to attract significant long-term capital, driven by investors actively chasing high yields. This aligns with what I mentioned in my October 1st post (https://(x.com)/qinbafrank/status/2105638563165642904): the sharp rise in yields has altered the risk-reward structure of bonds. At current levels, bond markets are likely to see a gradual return of capital as the value proposition becomes more apparent. A strong auction result typically leads to a pullback in yields. However, the Fed's September meeting minutes released last night indicated: "Most participants judged that one more increase in the target range for the federal funds rate before year-end would likely be appropriate." While some Fed officials have recently downplayed the likelihood of action in October, the consensus for another rate hike this year remains strong, even if October might not be the time. In other words, the 10-year Treasury auction results boosted short-term sentiment, but the Fed's policy signals keep expectations for prolonged high rates intact. The next key test will be tonight's $22 billion 30-year Treasury auction. This post is sponsored by @bitget_zh: "Bitget Trade U.S. Stocks: Instant Access, Seamless Trading.