The US treasury auctioned off $16B of 20 year bonds at a high yield of 4.499%. The WI level at the time of the auction was at 4.49%.
High Yield:4.499%
- Previous auction: 4.036%
- Six-auction average: 3.968%
- WI at the time of the auction: 4.49%
Tail: 0.9 basis points
- Previous auction: 0.1bps
- Six-auction average: -0.3bps
Bid-to-Cover: 2.56X
- Previous auction: 2.68x
- Six-auction average: 2.64x
Dealers (they take what domestic and international player don't take): 11.35%
- Previous auction: 9.6%
- Six-auction average: 9.9%
Directs (they represent domestic US investors): 20.2%
- Previous auction: 21.7%
- Six-auction average: 19.3%
Indirects (they represent international investors): 68.45%
- Previous auction: 68.8%
- Six-auction average: 70.8%
Auction Grade: D
Summary: Bid to cover was lower than the 6-month average. The tail was nearly 1 BP above the WI level at the time of the auction. Both are indicative of ho-hum demand. The domestic demand was marginally above the 6-month average, but international demand (who takes the vast majority of US debt), was less than average.
Today, US yields are still sharply lower as the flash PMI data was weaker than expected, and that has traders hoping that the economy is back on a soft landing path. Time will tell.
- 2-year yield is at 4.946% -8.7 basis points
- 5-year yield is at 4.362%, -11.6 basis points
- 10-year yield 4.207% -12.0 basis points
- 30-year yield 4.307% -10.2 basis points
