The US treasury auctioned off the $52 billion a 5 year note at a high yield of 4.899%
- WI level at the time of auction was 4.88%
- Tail 1.9 basis points. The six-month average was -0.4 basis points
- Bid to cover came in at 2.36Xversus six-month average of 2.99X
- Dealers 19.4% versus six-month average of 12.3%
- Directs (a measure of domestic demand) 19.1% versus a 6 month average of 18.8%
- Indirects (a measure of international demand) 61.5% versus six-month average of 68.9%
Auction Grade: D-
The 5 year auction was horrible. The auction had a positive 1.9 basis point tail. The Bid to cover was well below the 6 month average. Domestic demand as measured by direct bidders was near the six-month average, but international demand was well below the 6 month average (and the prior of 71.1%).
Dealers take up the slack and were settled with 19.4% well above the six-month average of 12.3%.
Yuck!
Yields have moved up after the results
- 2-year yield 5.1 to 2% +5.2 basis points
- 10-year yields are trading at 4.950% up 11.1 basis points
- 30-year yield 5.090% up 12.8 basis points