The U.S. Treasury will auction off a $40 billion of the 3year notes at the top of the hour. The auction is the first of three this week. Tomorrow they will auction off at 10 year notes, and on Thursday they will auction off 30 year bonds.
The major six month averages of the major components shows:
- Bid to cover 2.56X
- Tail 0.3 basis points
- Directs (a measure of domestic demand) 18.9%
- Indirects (a measure of international demand) 60.1%
At the last auction, the tail came in at four basis points. The bid the cover was low at 2.33X. It was not well received.
What the Fed chair signaling the potential for 50 basis points, makes you wonder if the three or note auction will attract much demand.
