Strong U.S. 10-year Treasury Bond Auction with High Yield of 1.904%

The US Treasury 10-Year Bond Sale performed much better than expected, garnering an A rating across the Fixed Interest desk with strong demand from the international market. The tail was -2.2 basis points with WI level at time of the auction 1.926% and the high yield of 1.904% at the auction. Solid demand after yesterday’s $50 billion 3-yr note sale. 

The bid-to-cover ratio of 2.68x was above average 2.52x, as was indirect takedown 77.56% vs 65.5% average. The desk gave an A- rating on the auction.

Auction Highlights

  • Duration: 10 Years
  • Amount:  $37 billion
  • High yield 1.592% (prev 1.237%) (When-Issued: 1.595%)
  • WI level at time of auction 1.926%
  • Tail -2.2 basis points
  • Bid-Cover Ratio: 2.68X (prev 2.51) vs six-month average of 2.52X
  • Direct Accepted: 15.00% (prev 17.90%) vs six-month average of 16.2%
  • Indirect Accepted: 77.56% (prev 65.5%) vs six-month average of 70.8%
  • Dealers 7.4% (prev %) vs six-month average of 13.0%

Auction grade: A

Yields after the auction

  • 2-yr: UNCH at 1.34%
  • 3-yr: +3 bps to 1.60%
  • 5-yr: -2 bps to 1.79%
  • 10-yr: -3 bps to 1.92%
  • 30-yr: -3 bps to 2.23%

Average results of previous 12 auctions: High yield: 2.005%

  • High yield: 1.488%
  • Bid-to-cover: 2.47
  • Indirect bid: 66.1%
  • Direct bid: 17.0%

Live From the Pit

From The TradersCommunity US News Desk