The US treasury auctioned off $42 billion of 10 year notes. That is a record amount ($41B was the previous record amount)
- High Yield: 4.093% , prev. 4.024%
- WI level at the time of the auction: 4.105%
- Tail: -1.2 bps, prev. 0.5bps, six-auction avg. 0.8bps
- Bid-to-Cover Ratio: 2.56x, prev. 2.56x, six-auction avg. 2.52x
- Dealers: 12.98% %, prev. 15.1%, six-auction avg. 14.9%
- Directs (a measure of domestic demand): 16.05%, prev. 18.7%, six-auction avg. 18.7%
- Indirects (a measure of international demand): 70.97%, prev. 66.1%, six-auction avg. 66.4%
Auction Grade: A
Highlights: Although the domestic demand was later than the six-month average, international demand was stellar at near 71% versus a six-month average of 66.4%. The dealers are of the six-month average saddle with less than what has been normal. The tail was a solid -1.2 basis points below the WI level at the time of the auction. Bid-to-cover was above the 6-month average.
The third leg of the coupon auctions this week will take place tomorrow when the treasury auctions off 30 year bonds.
