The US treasury will auction off $22 billion of 30 year bonds at the top of the hour. The auction culminates the auction calendar this week. The 3 year auction went well on Tuesday. The 10 year auction was a little below average.
The 6 month averages of the key component pieces shows:
- Bid to cover 2.31X
- Directs (a measure of domestic demand), 17.4%
- Indirects (a measure of international demand), 64.9%
- Dealers (they take the rest) 17.7%
The last auction had a high yield of 2.815%. The auction had a tail of 0.9% above the WI (when-issued) level at the time of the auction. The average six-month tail is 1.4 basis points indicative of less demand for the longer dated issues by domestic and international investors.
The current 30 year yield is at 3.026%.