- High-yield
- WI level at the time of the option 4.689%
- Tail 0.2 basis points vs 0.00 basis points for the 6 month average
- Bid to cover 2.49 Xvs export average of 2.67X 6-month average
- Dealers took 14.73% versus 17.1% 6-month average
- Directs took 20.21% versus 20.7% 6-month average
- Indirects took 65.16% versus 62.3% 6-month average
Auction grade:C
High and low lights.
- A positive tail of 0.2 basis points is not all that great as is the bid to cover which was less than the six-month average. However international demand was strong. Domestic demand was about average which settled the dealers with less than average. So overall it was a mixed auction.
- This was the largest two-year note auction ever
Overall yields are higher in trading today after starting the US session marginally lower:
- two year yield 4.713% +2.4 basis points
- 5-year yield 4.310% +2.5 basis points
- 10 year yield 4.283% +2.3 basis points
- 30-year yield 4.402% +2.3 basis points
At 1 PM, the U.S. Treasury will auction off five-year notes and will auction 7-year notes tomorrow. I'm not quite sure why they are auctioning both two and five year notes today. Usually when a double up because of a Fed meeting or a holiday. Perhaps it has to do with settling before month's end. With February being 29 days this year, the settlement date for the three auctions this week will be on 29 February.
