The US treasury will auction off $38 billion of 7 your notes at the top of the hour. The summary of the major components and their 6 month averages are outlined below:
- Tail: bps (previous: 0.3bps, six-auction average: -0.2bps)
- Bid-to-Cover: x (previous: 2.47x, six-auction average: 2.73x)
- Dealers: % (previous: 14.6%, six-auction average: 12.0%)
- Directs: % (previous: 19.9%, six-auction average: 17.6%)
- Indirects: % (previous: 65.5%, six-auction average: 70.4%)
Yesterday's 5-year note auction had a +1.9 basis point tail with a low bid-to-cover as well. International demand was well off the 6-month average.
The poor auction led to increased selling in US stocks and debt instruments (rates moved higher). Today, yields are lower with the five-year down -7.7 basis points and the 10 year down -5.5 basis points currently.
US stocks are heading into the auction near lows for the day:
- Dow industrial average is down -212 points or -0.64% at 32827.72
- S&P index is down - -52 points or -1.25% at 4134.93
- NASDAQ index is down -260 points or -2.02% at 12562.53
