U.S. Treasury long bond remained modestly higher after bouncing off its low in response to the recent completion of the $14 billion 20-year Treasury bond reopening, which was met with lukewarm domestic demand, but solid international demand given the auction outbids. The high yield tailed the when-issued yield by 2.7 bps with the bid-to-cover ratio and indirect takedown well above average. The desk gave an A rating on the auction. The S&P 500 and Nasdaq 100 are in the upper range of the day.
Today’s $14 bln 20-yr bond -2.7 basis point indicative of strong international demand. The desk gave an A rating on the auction.
- The domestic demand was below its six-month average indicative of softer domestic demand
- International demand (indirect) was also comfortably above the six-month average
- Primary dealers were left with just over than 10% versus normal around 14.3%
Auction Highlights
- Duration: 20 Years
- Amount: $14 billion
- High yield 3.420
- WI level 3.447%
- Tail -2.7 basis points. The 6-month averages -0.6 basis points
- Bid to cover 2.65X vs. six-month average of 2.64X
- Dealers 8% vs. six-month average of 12.4%
- Directs 14.1% vs. six-month average of 19.9%
- Indirects 78% vs. six-month average of 67.8%
Auction grade: A
Yields after the auction
- 2-yr: +1 bp to 3.23%
- 3-yr: +1 bp to 3.23%
- 5-yr: UNCH at 3.15%
- 10-yr: UNCH at 3.02%
- 30-yr: -2 bps to 3.16%
Prior auction results:
- High yield: 3.488%
- Bid-to-cover: 2.60
- Indirect bid: 67.4%
- Direct bid: 20.2%
Average results of previous 12 auctions:
- High yield: 2.353%
- Bid-to-cover: 2.46
- Indirect bid: 65.1%
- Direct bid: 18.6%
Live From the Pit
From The TradersCommunity US News Desk