The US Treasury 20-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 -1.5 basis points with WI level at time of the auction 2.225% and the high yield of 2.210% at the auction. Ahead of the auction U.S. Treasuries yields were higher across the curve (bearish). The 2-yr yield was up three basis points to 0.65%, 10-yr yield up three basis points to 1.45%. 30-yr yields up 6.5 bps.
Today’s $20 bln 20-yr bond reopening met solid demand with a high yield of 2.210%. The tail of the when-issued yield was 1.5 bps. The bid-to-cover ratio of 2.48x was above average 2.36x, as was indirect takedown 66.2% vs 60.8% average. The desk gave an A rating on the auction.
Auction Highlights
- Duration: 20 Years
- Amount: $20 billion
- High yield 1.942% (prev 1.942%)
- WI level at time of auction 2.225% Prev (1.965%)
- Tail -1.5 basis points (prev -2.3 basis points) vs 6 month average of 1.2 bps
- Bid-Cover Ratio: 2.48X (prev 2.59) vs six month average of 2.36X
- Direct Accepted: 17.0% (prev 20.83%) vs six month average of 18.8%
- Indirect Accepted: 66.2% (prev 64.83%) vs six month average of 62.8%
- Dealers 16.8% (prev 14.34%) vs six month average of 18.4%
Auction grade: A
Yields after the auction
- 2-yr: -2 bps to 1.01%
- 3-yr: -4 bps to 1.31%
- 5-yr: -4 bps to 1.61%
- 10-yr: -4 bps to 1.83%
- 30-yr: -4 bps to 2.14%
Average results of previous 12 auctions: High yield: 2.005%
- Bid-to-cover: 2.36
- Indirect bid: 60.8%
- Direct bid: 18.3%
Live From the Pit
From The TradersCommunity US News Desk