The U.S. Treasury will auction off $16 billion of 20 year bonds at the top of the hour. The six-month averages of the major components of the auction will be used to determine the auction's success or failure. Last month the auction was met with strong demand from overseas investors with the bid to cover much higher than the six-month average and a negative tail of -2.5 basis points
The component 6- month averages and prior auction results show:
- Tail 0.0 basis points (last -2.5 basis points)
- Bid to Cover: 2.61X (last 2.82X)
- DIrects (a measure of domestic demand): 18.5% (last 16.2%)
- Indirects (a measure of international demand): 68.3% (last 74.7%)
- Dealers: 13.2% (last 9.1%)