The US treasury is set to auction off $13 billion of 20-year bonds at the top of the hour. The six-month averages of the major components shows:
- Tail +0.5 basis points
- Bid to cover: 2.56x
- Directs (a measure of domestic demand): 19.7%
- Indirects (a measure of international demand): 66.6%
- Dealers (they take the rest): 13.7%
The last auction last month came in at a high yield of 4.595% with a large 3.3 basis point tail and Bid to cover at a lower than average 2.39X. We will see if the issue is supported by buyers today.
Overall US yields today are lower:
- 2-year yield 4.700%, -3.6 basis points
- 5-year yield 4.311%, -4.4 basis points
- 10-year yield 4.304% -3.6 basis points
- 30 year yield 4.447%: -1.9 basis points