U.S. Treasury auctions of $18 billion of 30 year bonds at a high yield of 3.585%

• High-yield 3.585%
• WI level at the time of the auction 3.609%
• Tail -2.4 bps vs six-month average of -0.2 basis points
• Bid to cover 2.45X versus six-month average of 2.37X
• Directs (measure of domestic demand) 16.33% vs. six-month average of 19.0%
• Indirects (measure of international demand) 74.63% versus six-month average of 69.4%
• Dealers 9.04% versus six-month average of 11.6%

For the third auction in a row this week, the international demand was strong, while the domestic demand was weaker than the six-month average. Dealers were saddled with less than normal thanks to the international demand.

The bid the cover was above the six-month average. The tail was a solid -2.4 basis points below the WI level at the time of the auction.

Auction Grade: A-

The demand may be coming from Japan as fears that the BOJ may continue the ratcheting up of the 10 year yields when the announce their latest policy decision next week.

Recall, that last month the BOJ moved the target ceiling yield to 0.50% from 0.25%. If yields move higher, prices move lower. So investors in Japan debt, may be looking to the US who is nearer the end of rate hikes.

A snapshot of the markets shows snapshot :

• Dow up 301 points or 0.87% at 34269.70
• S&P up 24.57 points or 0.62% at 3993
• NASDAQ NASDAQ The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since ass The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since ass Read this Term index up 71.71 points or 0.66% 11003.40
• Russell 2000 up 25.94 points or 1.41% at 1869.95

in the US debt market

• 2 year yield Yield A yield represents the earnings generated by an investment or security over a certain time period. Yields are typically displayed in percentage terms and are in the form of interest or dividends received from it.These figures do not include the price variations, which separates it from the total return. Consequently, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as A yield represents the earnings generated by an investment or security over a certain time period. Yields are typically displayed in percentage terms and are in the form of interest or dividends received from it.These figures do not include the price variations, which separates it from the total return. Consequently, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as Read this Term is down -8 basis points to 4.14%
• 10 year yield is down -11 basis points at 3.443%

/inflation