The U.S. Treasury auctioned off $12 billion of 20 year bonds. The auction details shows:
- High-yield 3.678%
- WI level at the time of the auction 3.705%
- Tail -2.7 bp vs six-month average of -0.5 basis points
- Bid to cover 2.83X versus six-month average of 2.57X
- Directs (a measure of domestic demand) 15.61% vs six-month average of 17.2%
- Indirects (a measure of international demand) 76.25% versus six-month average of 71.9%
- Dealers 8.14% (they take the rest) versus six-month average of 10.8%
Auction grade: B+
The 20 year bond auction was met with strong international demand that offset, more modest demand from domestic buyers. The Bid to cover was comfortably above the 6 months average. The tail was -2.7 bps through the WI level.
The only negative is the domestic demand was once again on the light side relative to the recent history.