Strong U.S. 20-year Treasury Bond Auction with High Yield of 2.651%

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

Leave a Reply

Your email address will not be published. Required fields are marked *