The US treasury auctioned off $40B of 10 year bonds:High yield 3.613%WI level at the time of the auction 3.643%Tail -3 BPS. Six-month average of -0.5
The US treasury auctioned off $40B of 10 year bonds:
- High yield 3.613%
- WI level at the time of the auction 3.643%
- Tail -3 BPS. Six-month average of -0.5 basis points
- Bid to cover 2.66X vs six-month average of 2.39X
- Directs (a measure of domestic demand) 15.19% versus 18.6% six-month average.
- Indirects 79.45% vs six-month average of 62.9%
- Dealers 5.36% vs 18.5% six-month average
Huge demand from international buyers after they took the day off yesterday for the three year note auction. The bid to cover was well above the six month average. The tail of -3.0 basis points is indicative of strong demand. Domestic demand as represented by the direct bids was less than average but they keep on getting out bid by international traders looking for the pickup in yield and perhaps the expectations at the US is closer to the end of the tightening cycle
Auction grade: A
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