Treasuries trade just below session highs after the completion of today’s $43 bln 5-yr note auction which met mediocre demand. The offering drew a high yield of 4.109%, which tailed the when-issued yield by 0.3 bps. Treasuries got support from the bid-to-cover ratio (2.48x) and indirect takedown (69.9%) above the prior 12-auction average. Equities were near their best levels of the day after overcoming a weak start with the S&P 500 (+0.3%) trailing the Nasdaq (+0.5%) ahead of the FOMC minutes release. The desk gave a B rating on the auction.
Today’s $43 bln bid-to-cover ratio (2.486x) and indirect takedown (69.95%) were above average. The desk gave an B rating on the auction.
- The domestic demand was above its six-month average indicative of stronger domestic demand
- International demand (indirect) was comfortably above the six-month average
Auction Highlights
- Duration: 5 Years
- Amount: $43 billion
- High-yield 4.109%
- WI level at the time of the auction 4.106%
- Tail 0.3 basis points
- Bid to cover 2.48X versus six-month average of 2.42X
- Directs 19.03% versus six-month average of 17.5%
- Indirects 69.95% versus six-month average of 65.9%
- Dealers 11.02% versus six-month average of 16.6%
Auction grade: B
Yields after the auction.
- 2-yr: -6 bps to 4.67%
- 3-yr: -4 bps to 4.40%
- 5-yr: -5 bps to 4.12%
- 10-yr: -6 bps to 3.90%
- 30-yr: -6 bps to 3.92%
Prior auction results:
- High yield: 3.530%
- Bid-to-cover: 2.64
- Indirect bid: 75.7%
- Direct bid: 15.4%
Average results of previous 12 auctions:
- High yield: 3.267%
- Bid-to-cover: 2.43
- Indirect bid: 64.4%
- Direct bid: 18.3%
Live From the Pit
From The TradersCommunity US News Desk