The U.S. Treasury will complete their auction cycle for the week by selling $18 billion or 30 year bonds at the top of the hour. The treasury auctioned off three or notes on Tuesday and 10 year notes yesterday. The 3 year note was met with decent demand. The 10 year note did showed tepid demand from investors.
The six-month averages of the key components for the 30 year bond auctions shows:
- Bid to cover 2.36X
- Tail +0.1 basis points
- Directs (a measure of domestic demand) 19.1%
- Indirect (a measure of international demand) 68.9%
- Dealers (they take the rest) 12.2%
The last option came in with a high yield of 3.682%. The tail was 3.2 basis points with a bid to cover of 2.25X. So overall the last auction was a dud.
