U.S. Treasuries completed this week’s note auctions with excellent demand for the $35 bln 7-yr note auction. The sale drew a high yield of 3.827%, which stopped through by 0.8 bps versus the when-issued yield, the bid-to-cover ratio (2.61x) and indirect takedown (72.3%) were well above average. The fixed interest desk rated the auction an A. Yesterday treasuries completed a $43 bln 5-yr note auction which met strong demand. Tuesday, we saw a $42 bln 2-yr note C rated auction.
Equities trade near their best levels of the session after another slate of mostly positive earnings news. Meta Platforms (META 240.66, +31.23, +14.9%) boosting index performance and driving buying interest in other mega caps. Dow +332.12 at 33633.90, Nasdaq +227.98 at 12082.31, S&P +53.78 at 4111.04
- The domestic demand was belowits six-month average indicative of stronger domestic demand
- International demand (indirect) was above the 12-month average.
- Primary dealers were left with 10.4% versus normal around 14.1%
Auction Highlights
- Duration: 7 Years
- Amount: $35 billion
- High-yield 3.827%
- WI level at the time of the auction 3.835%
- Tail 1.3 basis points vs six-month average of +0.9 basis points
- Bid to cover 2.61X v 12-month average of 2.52X
- Directs 17.3% v 12-month average of 19.2%
- Indirect 72.3% v 12-month average of over 67.7%
- Dealers 10.4% v 12-month average of 14.1%
Auction grade: A
Yields after the auction.
- 2-yr: +12 bps to 4.46%
- 3-yr: +11 bps to 4.14%
- 5-yr: +8 bps to 3.87%
- 10-yr: +7 bps to 3.79%
- 30-yr: +3 bps to 3.99%
Yields before the auction.
- 2-yr: +10 bps to 4.44%
- 3-yr: +9 bps to 4.12%
- 5-yr: +5 bps to 3.83%
- 10-yr: +5 bps to 3.77%
- 30-yr: +1 bp to 3.98%
Prior auction results:
- High yield: 3.563%
- Bid-to-cover: 2.41
- Indirect bid: 64.1%
- Direct bid: 21.1%
Average results of previous 12 auctions:
- High yield: 3.535%
- Bid-to-cover: 2.52
- Indirect bid: 67.7%
- Direct bid: 19.2%
Live From the Pit
From The TradersCommunity US News Desk