US Treasuries rallied Wednesday with most tenors picking up after the completion of today’s $35 bln 10-yr note reopening, which met excellent demand. The auction drew a high yield of 3.613% stopped through the when-issued yield by three basis points while the bid-to-cover ratio (2.66x) and indirect takedown (79.45%) were well above the 12-auction average. Today’s auction followed yesterday’s very weak 3-yr note sale, which had much to do with Fed Chair Powell’s Speech at the same time. Another factor was the U.S. Dollar Index traded down about -0.1% to $103.36. The desk gave an A rating on the auction.
The bid to cover 2.66x vs. six-month average of 2.39x, indirect takedown 79.45% percent vs. the six-month average of 62.9%. led the desk to give an A rating on the auction.
Auction Highlights
- Duration: 10 Years
- Amount: $35 billion
- 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 15.19% versus 18.6% six-month average.
- Indirects 79.45% vs six-month average of 62.9%
- Primary Dealers 5.36% vs 18.5% six-month average
Auction grade: A
Yields after the auction.
- 2-yr: -1 bp to 4.45%
- 3-yr: -3 bps to 4.09%
- 5-yr: -5 bps to 3.80%
- 10-yr: -4 bps to 3.63%
- 30-yr: -1 bp to 3.69%
Average results of previous 12 auctions:
- High yield: 3.069%
- Bid-to-cover: 2.43
- Indirect bid: 65.2%
- Direct bid: 18.1%
Prior auction results:
- High yield: 3.575%
- Bid-to-cover: 2.53
- Indirect bid: 67.0%
- Direct bid: 17.9%
- Directs a measure of domestic demand
- Indirects a measure of international demand
- Dealers take the balance
Source: US Treasury
Live From the Pit
From The TradersCommunity US News Desk