US treasury is auction off $12 billion of US 20 year bonds at the top of the hour

The US treasury will auction of $12 billion of 20 year bonds at the top of the hour. The good news is yields are higher in the US. So auction levels will be at the highest level for this issue.

The key 6 month averages of the components shows:

• Bid to cover 2.69X
• Tail, -1.3 basis points
• Directs (a measure of domestic demand) 18.5%
• Indirects (a measure of international demand) 72.2%
• Dealers (they take the rest) 9.3%

The last auction had a high yield of 3.82% with a bid to cover of 2.65X and a tail of -1.3 basis points.

Will the auction turn around the fortunes of the debt market today? That is what is potentially at stake for this auction.