The U.S. Treasury will auction off $18 billion of 30 year bonds at the top of the hour. The six-month averages of the major components shows:
- Tail: 6-month average 0.5bps
- Bid-to-Cover: 6 month average 2.35X)
- Directs (a measure of domestic demand): 6-month average 19.2%
- Indirects (a measure of foreign demand): 6-month average 68.9%.
- Dealers (they take the rest): 6-month avg. 11.8%
The previous auction came in at a high yield of 3.741% with a tail of -1.5 basis points. The bid to cover was also above average at 2.43X. The international demand was strong at 72.4%
The auction is the 3rd in the coupon sector. Yesterday, the treasury auctioned 3 and 10 year notes to weak demand from international investors. Both had larger than normal price concessions (higher yields) vs the WI level.
