The U.S. Treasury auctioned off $52 billion of three year notes at high yield of
- WI was trading at 1.241% at the time of the auction
- bid to cover 2.47X versus six month average of 2.42X
- Dealers 22.84% % versus six month average of 28.4%
- Direct 15.51% versus six month average of 18.4%
- indirect 61.7% vs 53.2% six month average
At the last auction last month, the yield came in at 1.0%. The run above 23.7 basis points certainly attracted strong demand from overseas traders. The indirect bids were well above the six month average (61.65% versus 53.2% average). Meanwhile direct bidders (or domestic purchasers) were much less than the six month average.
The bid the cover was marginally higher than the six month average. The tail was certainly influenced by the overseas buyers (-0.4 basis points versus a six month average of 0.0 basis points).
How would give the auction a grade of B+. The domestic demand was a bit disappointing, but the move up in yields is certainly welcome from the international community.
