Treasuries have moved to their best levels of the day after 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 -1.4 basis points with WI level at time of the auction 2.665% and the high yield of 2.651% at the auction.
Today’s $16 bln 20-yr bond tail is negative indicative of strong demand. The average is +0.8 basis points for this issue. The desk gave an A+ rating on the auction.
- The domestic demand was well above its six-month average indicative of strong demand
- International demand (indirect) was also comfortably above the six-month average
- Primary dealers are left with less than 10% versus normal around 18%
Auction Highlights
- Duration: 20 Years
- Amount: $16 billion
- High yield 2.651% (prev )
- WI level at time of auction 2.665% Prev ()
- Tail -1.4 basis points (prev -1.5 basis points) vs 6-month average of 0.8 bps
- Bid-Cover Ratio: 2.72x versus six-month average of 2.41x
- Direct Accepted: 26.23% vs six-month average of 18.9%
- Indirect Accepted: 64.39%vs six-month average of 63.2%
- Dealers 9.59% vs six-month average of 17.9%
Auction grade: A+
Yields after the auction
- 2-yr: -2 bps to 2.13%
- 3-yr: -6 bps to 2.32%
- 5-yr: -4 bps to 2.34%
- 10-yr: -5 bps to 2.33%
- 30-yr: -6 bps to 2.54%
Average results of previous 12 auctions: High yield: 2.005%
- High yield: 2.091%
- Bid-to-cover: 2.40
- Indirect bid: 62.0%
- Direct bid: 19.0%
Live From the Pit
From The TradersCommunity US News Desk