Auction Reaction
10-yr note and the long bond dip to fresh lows for the day while shorter tenors continue trading on lows that were reached in mid-morning action in immediate reaction to today’s $58 bln 3-yr Treasury note auction, which met good demand.
The sale drew a high yield of 4.179%, which stopped through the when-issued yield by 0.6 basis points.
The bid-to-cover ratio (2.60x) was a touch below average (2.63x), but indirect takedown (67.5%) was above the prior 12-auction average (63.2%).
The U.S. Treasury will continue this week’s auction slate with a $39 bln 10-yr note reopening tomorrow.
Yields after:
2-yr: +2 bps to 4.14%
3-yr: +2 bps to 4.17%
5-yr: +4 bps to 4.25%
10-yr: +4 bps to 4.52%
30-yr: +5 bps to 5.04%
Treasury Auction Results
$58 bln 3-year Treasury note auction:
High yield: 4.179% (When-Issued: 4.185%)
Bid-to-cover: 2.60
Indirect bid: 67.5%
Direct bid: 24.8%
Average results of previous 12 auctions:
High yield: 3.714%
Bid-to-cover: 2.63
Indirect bid: 63.2%
Direct bid: 23.4%
Prior auction results:
High yield: 4.192%
Bid-to-cover: 2.64
Indirect bid: 63.7%
Direct bid: 21.0%