Most U.S. Treasuries tenors are trading in positive territory, though off from morning highs with the 30-yr yield now unchanged for the day after the $18 bln 30-yr bond reopening. The auction met solid demand. The high-yield was 3.661% which was equal to the WI level at the time of the auction. International demand came in at 69.12% under the twelve-month average 69.7%. The auction followed lower than expected CPI and PPI reports for March.
The Fixed Interest desk rated it a C+ after yesterday’s D on the 10-year auction and Tuesday’s 3 Year sale drawing a C+ also. Equities have hada strong day with the Nasdaq (+1.6%) and the S&P 500 (+0.9%).
The bid-to-cover ratio of 2.36x was below average 2.38x, indirect takedown was 69.1% vs 69.7% 12-month average. The desk gave a C+ rating on the auction. Today’s buying is one month after the Collapse of banking shares suggests the bond market is already looking past inflation-related headlines to capital preservation and an expected deceleration in growth.
Auction Highlights
- Duration: 30 Years
- Amount: $18 billion
- High yield 3.661%
- WI level at time of auction 3.661%
- Tail 0.0 bps vs +0.1 basis points 6-month average
- Bid to cover 2.36X vs 2.38X 12-month average
- Directs (a measure of domestic demand) 19.8% vs 18.3% 12-month average
- Indirect (a measure of international demand) 69.1% vs 69.7% 12-month average
- Dealers (they take the rest) 11.10% vs. 12.0% 12-month average
Auction grade: C+
Yields after the auction
- 2-yr: -1 bps to 3.96%
- 3-yr: -2 bps to 3.68%
- 5-yr: -2 bps to 3.46%
- 10-yr: -1 bp to 3.41%
- 30-yr: UNCH at 3.65%
Prior auction results:
- High yield: 3.877%
- Bid-to-cover: 2.35
- Indirect bid: 70.7%
- Direct bid: 19.8%
Yields ahead of the auction
- 2-yr: -4 bps to 3.93%
- 3-yr: -5 bps to 3.65%
- 5-yr: -4 bps to 3.44%
- 10-yr: -3 bps to 3.39%
- 30-yr: -2 bps to 3.64%
Average results of previous 12 auctions:
- High yield: 3.401%
- Bid-to-cover: 2.37
- Indirect bid: 69.2%
- Direct bid: 18.2%
Live From the Pit
From The TradersCommunity US News Desk